A FINRA arbitration panel just ordered Ameriprise Financial Services, LLC to pay Edward Jones 1) over $500,000 in compensatory damages, 2) $375,000 in punitive damages, and 3) $1,125,000 in attorneys' fees. The panel ordered Ameriprise’s advisor, formerly with Edward Jones, to pay 1) over $1,300,000 in compensatory damages, and 2) $750,000 in punitive damages. The awards were based upon a variety of claims by Edward Jones, including 1) breach of an employment contract, 2) misappropriation of trade secrets, and 3) tortious interference with a contract.
Ameriprise and its new advisor brought a variety of counterclaims asserting that Edward Jones’ Statement of Claim was “nothing more than an abuse of process intended to intimidate its former advisors and competitor, Ameriprise, to interrupt and interfere with their business and longstanding client relationships, mislead clients into believing that the advisor did something wrong and/or that the clients must keep their accounts at [Edward Jones], all while running up unnecessary legal fees for the advisor.” These claims were rejected by the panel. The advisor, for his part, made counterclaims “that but for [Edward Jones’] and its advisors’ misconduct following his termination, many other clients would have transferred their accounts to continue working with [the advisor].” The panel rejected these counterclaims as well.
Just today, Cosgrove Simpson
concluded an amicable settlement between its advisor client and his former firm
and resolved potential claims regarding the non-solicitation provision of an
employment contract. Food for thought.
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