J.P. Morgan Securities (JPMorgan) is seeking a temporary restraining order against a former employee, Robert P. Lewis, on the grounds that when he moved to Wells Fargo in October he inappropriately solicited JPMorgan clients, getting them to transfer some $19.8 million in assets and go with him to his new firm.
According to a complaint filed in the U.S. District Court for the District of Arizona last week, Lewis left the Tucson, Ariz., JPMorgan Chase Bank branch on October 20 and immediately joined the Oro Valley, Ariz., branch office of Wells Fargo. A BrokerCheck search revealed that Lewis dually registered with Wells Fargo that same day.
The JPMorgan complaint alleged that in the days leading up to his departure, Lewis violated his employment agreement by accessing and retaining the personal information of 60 key clients. In some cases, the complaint said, he looked at the account for less than a minute before moving to a different client’s account.
“On information and belief, the [defendant] took the information with him from JPMorgan to Wells Fargo (by taking photos of his computer screens with his cell phone, or via some other means) and has used such information at Wells Fargo to solicit JPMorgan clients,” the complaint stated. “Without misappropriating JPMorgan’s confidential information, defendant would not have had JPMorgan clients’ personal phone numbers and would not have had the ability to contact the clients immediately after [he] resigned.”
At the time of the court filing, Lewis allegedly was successful in moving 35 clients to Wells Fargo with $19.8 million in assets. In total, Lewis was responsible for 325 clients with $115 million in assets under management while at JPMorgan, the complaint said.
The firm made several allegations against him, including a breach of contract, violation of the Arizona Uniform Trade Secrets Act, breach of fiduciary duty and unfair competition.
JPMorgan is seeking the temporary restraining order to freeze Lewis’s clients at the firm while awaiting a mandatory arbitration by the Financial Industry Regulatory Authority. It can take as long as 18 months for disputes over who is entitled to a client’s assets under management to be heard and settled by Finra.
Before joining JPMorgan, Lewis had worked as a dually registered advisor at Merrill Lynch from 2001 to 2007, according to BrokerCheck. In 2007, he joined Chase Investment Services, an affiliate of JPMorgan, and worked there until Chase merged into JPMorgan in 2012. In 2012, he was promoted to senior financial advisor; he also dually registered with JPMorgan and signed a new non-solicitation agreement with the firm that restricted his communications with JPMorgan clients should he resign so that for a year he could only notify them about a job change.
Despite his prior experience, Lewis had not brought any clients with him when he started his career at JPMorgan, and nearly all of the clients he managed assets for were assigned to him by the firm, the complaint said.
“Although [Lewis] had some prior industry experience before joining JPMorgan, on information and belief, he brought no clients with him to JPMorgan,” the complaint stated. “In fact, he was permitted to identify all client relationships that he had established prior to commencing employment with JPMorgan, and those pre-existing relationships would be carved out from his non-solicitation restrictions. [The] defendant identified no such pre-existing relationships.”