LPL Financial secures a significant legal victory in a recruiting dispute with Ameriprise while minimizing the impact of an unfavorable ruling in another case.
A federal court in Arizona denied Ameriprise’s request for a temporary restraining order against three former advisors who moved to LPL. Ameriprise claims these advisors improperly solicited their former clients and took confidential information.
This case is one of several lawsuits Ameriprise has filed against LPL over advisor transitions. LPL calls the legal actions a “deeply misguided” effort of “serial litigation.” According to LPL, Ameriprise has initiated eight cases related to its recruiting practices.
The matter now moves to a Financial Industry Regulatory Authority (Finra) arbitration panel for further proceedings.
“We look forward to presenting overwhelming evidence to a panel of experienced Finra arbitrators,” an Ameriprise spokeswoman says. “Importantly, we’ve won several other cases concerning LPL’s recruiting practices, which compromise client privacy.”
LPL, however, celebrates the Arizona ruling. “We are thrilled with this outcome,” the firm states. “The court saw through Ameriprise’s baseless claims and rejected its attempts to undermine advisors’ independence by asserting ownership over their client relationships.”
Meanwhile, a separate legal battle unfolds in Washington, where a federal judge upheld an injunction against LPL and former Ameriprise advisor Douglas Kenoyer. The decision follows a Finra arbitration panel’s preliminary determination that Ameriprise is likely to prevail in its claim that Kenoyer improperly solicited clients and took confidential information upon leaving Ameriprise.
LPL downplays the ruling, emphasizing that it aligns with the court’s earlier decision to grant Ameriprise a temporary restraining order in October. “This decision was expected,” an LPL spokeswoman states. “It remains consistent with prior rulings and, importantly, makes no findings against LPL.”
Ameriprise, however, views the decision differently. “This ruling further validates Ameriprise’s claims that LPL’s recruitment practices endanger client information and advisor integrity,” a spokeswoman asserts.
As both cases move through arbitration, the ongoing legal battles highlight the intensifying competition between LPL and Ameriprise and the broader implications for advisor transitions in the wealth management industry.
