LPL Financial, facing multiple lawsuits by competitor Ameriprise Financial over advisor recruiting practices, fired back in two cases last week, accusing Ameriprise of abusing the courts and trying to chill competition for financial professionals and clients.
"This action is a public relations stunt masquerading as a lawsuit," LPL said in an Oct. 17 filing in U.S. District Court for Southern California, where Ameriprise alleged in July that LPL engages in "shocking" recruiting tactics that encourage financial advisors to bring confidential client information with them.
"Ameriprise, losing hundreds of advisors to a competitor in the marketplace, seeks to chill further departures through unwarranted and unfounded legal action," LPL said in response to Ameriprise's motion seeking a preliminary injunction.
Ameriprise aims to block LPL from retaining, using, disclosing or transmitting any improperly obtained information relating to its clients.
"Ameriprise's Motion is meritless. It falsely alleges that five advisors who left Ameriprise between February and May 2024 retained and used certain client information to which they were not entitled," LPL contends, among other points, in its response. "Each advisor declares under penalty of perjury that they did not."
In another case filed last week in Washington state, Ameriprise accused LPL and advisor Douglas Kenoyer of misappropriation of trade secrets and unfair competition, among other violations, stemming from Kenoyer's employment switch last month from Ameriprise to LPL.
Ameriprise asked the court to issue a preliminary injunction and temporary restraining order barring Kenoyer and LPL from further solicitation and from using Ameriprise's confidential information pending a Financial Industry Regulatory Authority arbitration on the matter. The firm also asked the court to compel the defendants to return that information.
Ameriprise alleges that Kenoyer claimed protections from the Protocol for Broker Recruiting but had already violated it by pre-soliciting clients and taking confidential documents and information, and violated his agreements with Ameriprise.
LPL and Kenoyer both responded on Oct. 17.
"Ameriprise provides no factual support for the anticompetitive relief it seeks to impose on LPL. It makes cursory, unsupported and false allegations that LPL is misappropriating confidential information and trade secrets," LPL contends in its filing in the case.
LPL makes clear to all incoming Ameriprise advisors that they must comply with their contractual commitments, all applicable privacy rules and regulations, and the industry agreement known as the Protocol for Broker Recruiting, LPL says. "Ameriprise offers no evidence otherwise."
"After engaging in serial, vexatious litigation against LPL — without ever providing any factual support for its meritless claims — Ameriprise here reveals its true goal: to prohibit LPL from 'soliciting any employee of Plaintiff,'" LPL alleges.
