A federal judge has thrown out a request by Edward D. Jones & Co. for a temporary restraining order against a financial advisor whom the company accused of stealing confidential and trade secret information of “five-star” clients prior to his termination.

Edward Jones had sought to block Cory Clem from contacting clients and revealing the company’s trade secrets, arguing that such action has harmed the company. In its complaint, filed in the U.S. District Court for the Central District of Illinois on January 26, the company asked the court to order Clem to return all confidential and trade secret client information in his possession, cease from directly or indirectly soliciting Edward Jones clients, and cease contacting Edward Jones employees.

But Judge Sara Darrow, in a Feb. 8 decision, said Edward Jones failed to establish that Clem has used the company’s information to solicit clients or misappropriated trade secrets. While she said “there is a presumption of irreparable harm to a plaintiff in [such] cases … [there is] not enough of a factual bridge to support that somehow the damage that Edward Jones claims is occurring, and that damage would be utilizing that information as a result of a contractual breach to solicit clients and therefore result in a loss to Edward Jones,” according to a court transcript obtained by Financial Advisor.

“At best they've established that Clem, by his own admission, did play a little fast and loose with the confidential information and was not careful with it, but there is no information that he used that information after soliciting it to obtain clients, and there's no evidence that he hasn't returned all of it,” Darrow added, according to the transcript.

The judge also sided with Clem in noting that a restraining order “would have the potential to chill [his] ability to notify his clients of his move,” which could potentially harm his former clients who are legally entitled to know his new employment and act on such information.

Clem, who worked in the firm's Macomb, Ill., office, had been with Edward Jones, where he began his career, since 2010. He joined Ameriprise on Jan. 24, three days after he was fired.

“We are very pleased with the court’s decision,” Ameriprise said in an emailed statement.

The company also issued this statement from Clem: “I came to Ameriprise to better serve my clients with the company’s intuitive technology, practice management capabilities and products and services.”

In a statement, Edward Jones said, “We take seriously our obligations to safeguard and protect our clients' information. We have terminated Clem's employment and continue to take appropriate steps to fulfill our commitments to clients. Our top priority remains serving our clients and helping them achieve financially what is most important to them.”

The complaint said Clem began planning his move to Ameriprise in the fall of 2022, when he created a list of "five-star" clients that included their assets, their account types, their net worth and their investments. The company alleged Clem later uploaded portions of the list to his personal laptop that contained information about 321 Edward Jones client households and 484 client contacts.

Clem was fired by Edward Jones on Jan. 20 after a financial advisor at the branch informed the company of Clem's action, the complaint said.

Clem’s attorney, Michael S. Taaffe at Shumaker, Loop & Kendrick LLP in Florida, declined comment, saying he was not authorized to speak on behalf of Clem or Ameriprise. But, according to the court transcript, he argued that there is no evidence Clem has solicited clients since he’s been terminated, and they have made that clear to Edward Jones.

He also noted that the software used to compile the client list stores only the names, addresses and phone numbers of clients. “It doesn't have any space to put any financial information, Social Security numbers, account numbers or anything else,” he said.

Taaffe said that since Clem has been at Ameriprise, he, with the supervision of an Ameriprise registered representative, has recreated his client list from memory. “They have gone online through the whitepages.com, which he sent you an example of, and we have saved every single one we’ve got from the public records showing that it’s not a trade secret because you can get it in the public record.” So far, he has been able to recall about 200 clients of the 500 he served, the attorney said.