The brokerage arm of JPMorgan Chase is asking a federal judge to stop a former broker from taking as much as $185 million in assets under management to her new position at Morgan Stanley.
The lawsuit by J.P. Morgan Securities alleges that Susan M. VanSpybrook, who started working for J.P. Morgan in 2007 in the Northville, Mich., office, violated her non-compete agreement with the firm when she jumped to Morgan Stanley on Oct. 18 and started calling clients to encourage them to transfer their assets with her.
The suit, filed in the U.S. District Court for the Eastern District of Michigan, is asking for a temporary restraining order and a preliminary injunction against VanSpybrook pending the completion of a Finra proceeding on the client ownership issue.
While at J.P. Morgan, VanSpybrook managed 277 clients with about $185 million in AUM, according to the complaint. At the time of the filing, she had already transferred $11.9 million and six clients to the Farmington Hills, Mich., office of Morgan Stanley, the complaint said.
Morgan Stanley didn't immediately reply to a request for comment.
“VanSpybrook has solicited at least a dozen JPMorgan clients to move their accounts from JPMorgan to her at her new firm,” the complaint said. “The clients have informed JPMorgan that VanSpybrook’s communications have been more than simply announcing her change of employment, and that she is actively requesting meetings with the clients or otherwise seeking to induce them to do business with her at her new firm.”
Virtually all of VanSpybrook’s clients were either pre-existing J.P. Morgan clients who were assigned to her or were developed by her while at the firm with the firm’s assistance, according to to the complaint.
VanSpybrook began her career in 2003 when she joined Troy, Mich., firm Axa Advisors as a broker, according to BrokerCheck. In 2007 she moved to Chase Investment Services as a dually registered rep. Chase was acquired by J.P. Morgan in 2012.
At the time that she first joined Chase as a financial advisor, VanSpybrook signed a non-solicitation agreement prohibiting her from soliciting clients for one year after the end of her employment, the complaint said. In February 2014, she was promoted to a private client advisor of Chase Wealth Management and signed another non-solicitation agreement, the complaint said.
“As a Financial Advisor and a Private Client Advisor, VanSpybrook was not expected to engage in cold calling or attempt to build a client base independent of referrals from JPMorgan,” the complaint said.