Judge Denies Ameriprise’s Restraining Order Against LPL, Former EmployeesJudge Denies Ameriprise’s Restraining Order Against LPL, Former Employees

A federal judge in Arizona shot down Ameriprise’s attempt for a temporary restraining order against several former employees who left to join LPL Financial, writing that the firm's arguments are “insufficient to show success on the merits of the claims against LPL.”

U.S. District Judge Susan Brnovich’s order denying Ameriprise’s motion is the latest development in the case involving the two major firms, which began when Jared Roskelley, Kyle Robertson and Matthew Tinyo resigned in late January to join LPL Financial. 

Ameriprise filed a lawsuit several weeks later, claiming the reps had violated the Protocol for Broker Recruiting with LPL’s urging and support. The agreement clarifies information advisors can take when changing jobs; both firms are signatories. LPL responded that Ameriprise was “chasing headlines” by trying to smear the firm and its new hires.

However, according to Brnovich’s order, Ameriprise’s allegations fell short by “injecting inaccurate ambiguity” into LPL’s claims that it hadn’t received any information originating from Ameriprise.

“Ameriprise’s arguments fail to elevate its allegations beyond mere speculation,” the order read.

In its filing, Ameriprise claimed that the three departing employees had printed nearly 9,000 documents over several days with confidential client information, purportedly with photographs and videos of the reps leaving Ameriprise offices with boxes, client packages and heavy backpacks, presumably filled with printed documents.

According to the judge’s order, the reps claimed the printed pages were part of mailings sent to clients in a longstanding practice “predating their employment with Ameriprise.” They noted their branch manager authorized them to do so, even if it was not typical Ameriprise practices. 

However, the reps denied retaining any other documents, despite Ameriprise speculating that the mailings were sent so the reps could “later recapture” them from clients to avoid the Protocol’s demands.

“But the Court cannot conclude that the individual defendants sending their clients their account information absent more than speculation is in breach of the Protocol or not allowed as part of their employment with Ameriprise,” Brnovich wrote.

According to Ameriprise, the court’s ruling acknowledged the case was “better suited” for FINRA arbitrators. A firm spokesperson said it would “look forward to presenting the overwhelming evidence” in the case.

“Importantly, we’ve prevailed in several other cases pertaining to the egregious recruiting practices by LPL and its advisors that put clients’ privacy at risk—including a recent FINRA arbitration decision in our favor and several federal court decisions,” the spokesperson said. “We remain committed to protecting clients’ confidential information.”

An LPL spokesperson said the firm was “thrilled” by the decision.

“It is evident from the ruling that the court saw through the baseless claims brought by Ameriprise and that their attempts to strip independence from advisors by claiming ownership of their books were denied,” they said. “True independence prevailed here; we remain confident it will in future matters.”

The scuffle over the trio’s departure is the latest in several lawsuits Ameriprise filed against LPL, accusing the firm (and former employees) of similar actions.

In one case, Ameriprise accused Washington-based former employee Douglas Kenoyer of breaching his contract when he left to join LPL by illegally soliciting clients and taking client information. However, Kenoyer called the suit against him the “latest salvo in an economic war.” 

As part of Ameriprise’s defense in the suit against the three former employees, it noted that FINRA arbitrators recently ruled in Ameriprise’s favor against Kenoyer and LPL, granting an injunction as the proceedings continue. 

In the filing, arbitrators allege Kenoyer wasn’t protected by the Protocol because he “pre-solicited Ameriprise clients, solicited Ameriprise advisors, asked Ameriprise advisors to pre-solicit Ameriprise clients, and took Ameriprise confidential information that would be allowed under the protection of the Protocol, if eligible, as well as information not allowed under the Protocol.”