A large California registered investment advisor is suing a former employee and Ameriprise Financial Services Inc. for allegedly stealing information and using it to illegally solicit clients.
Hanson McClain Advisors, based in Sacramento, Calif., is suing its former employee, Thomas Chandler, and his new employer, Ameriprise, for allegedly stealing “valuable confidential and proprietary information” before and after Chandler abruptly resigned from Hanson McClain on August 29, just before the Labor Day holiday weekend, according to the suit filed in Superior Court of California in Sacramento in December. The suit also names as a defendant an Ameriprise branch manager, Kable Doria.
“Defendants egregious and despicable conduct is the 21st century version of highway robbery,” the suit claims. Chandler, Ameriprise and Doria conspired to take Hanson McClain clients’ names, account numbers, account values, e-mail addresses, telephone numbers and other data from the secured computer network of the RIA, the court papers say.
Chandler had worked at Hanson McClain as a salaried advisor from 1999 to 2014. The conspiracy started in July 2014, before Chandler quit without giving notice. The information was used to unfairly compete with Hanson McClain, an RIA with $2 billion in client assets under management and administration, the suit says. The firm was founded in 1993 by Scott Hanson and Pat McClain.
The suit claims Chandler and Ameriprise destroyed evidence to cover up the theft of information, which was used for their own personal and financial benefit. The clients, whose information was stolen, are clients of the firm, not of the individual advisors, Hanson McClain says.
The Hanson McClain employee handbook states that client information obtained by advisors is company property and must be returned to the company when the employee leaves, according to the lawsuit.
Hanson McClain is asking for an injunction preventing Chandler and Ameriprise from using the information that was taken from the firm and that all information be returned. The firm also is seeking double damages for the “willful and malicious misappropriation of Hanson McClain proprietary and confidential trade secrets,” plus punitive damages.
A spokesman for Ameriprise has been quoted as saying the lawsuit is without merit and that Chandler had the right to take the information. Advisors have a right to inform clients of a move to another firm, according to Ameriprise. The company did not return phone calls for further comment.