Citi: Advisor Improperly Lured Clients to Move Millions to Wells Fargo

Citibank has accused Michael K. Fowler, a recently resigned senior wealth advisor, of improperly soliciting clients to follow him to Wells Fargo and is pursuing a case against him before industry arbitrators and in court. The firm contends that his efforts have resulted in clients transferring over $13 million in assets.

Citibank, along with Citigroup Global Markets, alleged in a federal court complaint last week that Fowler violated his Citi offer letter and employment contract’s non-solicitation and confidentiality provisions by trying to induce over a dozen clients to join him at competitor Wells Fargo Clearing Services.

Citi and Fowler, who also had been a Citi vice president, agreed in court this week to a proposed order to temporarily restrain and enjoin him from soliciting his former clients pending a Financial Industry Regulatory Authority arbitration. The agreement wouldn’t stop Citi clients from transferring their accounts to Fowler at Wells Fargo.

“Unfortunately, it appears that (Fowler’s) improper solicitation efforts have proven successful, as approximately 16 clients/households with assets in excess of $13 million already have transferred their accounts from Citi to Fowler at Wells Fargo,” Citi’s complaint in the U.S. District Court for the Eastern District of Virginia says.

When he resigned Sept. 5, Fowler serviced about 304 families, or relationships, at Citi, with assets under management totaling about $171 million, the complaint states. He immediately started a job with Wells Fargo, the suit notes.

Citi alleges that Fowler, who worked in Citi Personal Wealth Management in Reston, Virginia, improperly solicited Citi clients to follow him to Wells Fargo and took with him and used confidential client information.

Over a dozen Citi clients have informed the financial institution that Fowler’s communications “have been more than simply announcing his change of employment, and that he is actively seeking to induce them to do business with him at Wells Fargo,” the complaint alleges.

Clients told Citi that Fowler called them, in some cases multiple times, to tout Wells Fargo, with one client reporting that the advisor told her that Citi is antiquated, and another saying that he told her that Wells Fargo can provide better service, according to the complaint.

Another client said that Fowler told him that the Citi employee who would be handling the client’s accounts had no experience, the complaint alleges.

“This is a maliciously false statement, as the Citi Wealth advisor who replaced Fowler on the account has more than 20 years of investment experience. The client also stated to Citi that he told Fowler that he was not interested in Wells Fargo and to stop reaching out to him due to the repeated calls,” the complaint alleges.

“Mr. Fowler denies the allegations and will vigorously defend himself,” his attorney, Thomas B. Lewis, told ThinkAdvisor via email. Fowler is “pleased with the consent agreement filed with the court and looks forward to defending the allegations filed by Citi in FINRA arbitration.”

Wells Fargo had no comment.

Credit: Bloomberg