J.P. Morgan Securities has filed a lawsuit against a Michigan-based broker and former employee, alleging he broke nonsolicitation agreements when trying to attract former clients to his new role at Ameriprise.
The suit seeking a temporary restraining order against Lewis Duncan III is the latest in a number of recent cases from J.P. Morgan accusing former employees of similar misconduct.
Duncan had been with a number of former J.P. Morgan affiliates for more than a decade, beginning on the bank side before moving into a financial advisor role, and eventually becoming a private client advisor operating out of a bank branch office in Flint, Mich., according to the suit filed in Michigan federal court.
But Duncan suddenly resigned on July 8, immediately joining Ameriprise in its own Flint office, and began soliciting clients of his former employer, according to J.P. Morgan. The firm allegedly heard from more than 20 clients that Duncan contacted to join him at Ameriprise, calling them on personal cell numbers in overt attempts to get their business.
A day before Duncan resigned, he held meetings with two J.P. Morgan clients, setting follow-ups for the following week, but a day after his resignation, Duncan allegedly called one of the clients to change the meeting to be at his Ameriprise office. In numerous situations, clients said Duncan had hoped to continue the relationship and that they would move their accounts, according to J.P. Morgan.
“Duncan has made repeated calls to some JPMorgan clients, to the point that more than one JPMorgan client has told the firm that they are not happy with the instant and repeated follow-up calls from Duncan,” the suit read. “One JPMorgan client indicated that she was annoyed by how many times Duncan asked her to follow him to Ameriprise, saying ‘I have had enough.’”
In one case, a client told J.P. Morgan that Duncan called her, and learned that the client intended to meet with their newly assigned J.P. Morgan advisor. Duncan allegedly asked them to cancel the meeting, telling the client they would need to provide any account information to transfer their accounts, as Duncan had already completed the forms for them. J.P. Morgan believed the only way Duncan could have completed that kind of paperwork was if he took client information with him to Ameriprise, in violation of agreements he had with the firm.
To support their case, J.P. Morgan said two days before he resigned, Duncan accessed more than 100 client profiles on the firm’s system, viewing about 76 in the span of less than 45 minutes. In less than 30 minutes on June 27, he allegedly accessed more than 60 profiles. These included client names, email addresses and phone numbers, among other information.
“I am not aware of any legitimate business reason why Duncan would need to access, just two days before his resignation and in rapid succession, the client profiles for nearly one-third of the JPMorgan clients he was servicing,” attorneys for the firm Abbott Nicholson wrote on behalf of J.P. Morgan Securities in the suit. Ameriprise declined to comment on this story.
To date J.P. Morgan estimates that about 20 households with approximately $24 million in assets have transferred their business from J.P. Morgan to Duncan at Ameriprise, according to the suit.
The suit against Duncan is the latest in a number of recent court actions filed by J.P. Morgan to prevent former brokers from allegedly soliciting previous clients for their new firms. Last week, J.P. Morgan argued a former broker also from Michigan had attracted more than $20 million in business when he resigned to join Stifel. J.P. Morgan also filed suits requesting TROs against an Arizona-based former broker who left for Ameriprise, as well as a married duo of advisors who departed the bank for Wells Fargo.
