A former JPMorgan Chase & Co. private client advisor who jumped ship to Wells Fargo & Co. agreed to temporarily stop soliciting clients from his former book worth more than $250 million while an arbitration is underway.
Gary Carruthers, who resigned in September, was sued by JPMorgan last week after persuading more than two dozen former clients with $24.3 million in assets under management to transfer their business to Wells Fargo. JPMorgan alleges he violated contracts barring him from soliciting clients for a year after leaving.
The consent agreement was approved on Monday by New York state court judge Arthur Engoron in Manhattan. The accord will remain in place until the Financial Industry Regulatory Authority issues a dispute-resolution decision, the judge said.
Under the consent agreement, Carruthers must also return to JPMorgan all documents regarding the bank’s clients, employees or businesses. JPMorgan argues Carruthers engaged in “highly suspicious” computer activity during the month before he resigned, rapidly accessing “an unusually high number of client profiles.”
Wells Fargo isn’t named as a defendant in the suit, but JPMorgan claims the San Francisco-based bank “incentivized” Carruthers to breach the restrictions with financial inducements totaling more than $1 million to switch jobs.
The bank says Carruthers had about 369 clients with about $250 million under management at the time of his resignation, and that the “vast majority” of them were either pre-existing clients or were assigned to him by others at the bank. JPMorgan says several of its clients informed the bank that Carruthers had reached out to them to discuss his move to Wells Fargo.
Neither JPMorgan nor Wells Fargo immediately responded to messages seeking comment. Michael C. Bond, a lawyer for Carruthers, also didn’t immediately return messages seeking comment.
This article was provided by Bloomberg News.