For nearly four years, LPL helped at least 30 former Ameriprise advisors use an internal system to upload information for thousands of their ex-clients before that practice was abandoned in early 2022.
That's according to testimony from an LPL executive this week in her firm's ongoing recruiting dispute with its independent broker-dealer rival Ameriprise.
Sinquimani said the data transferred went beyond the limits set by an industry-spanning pact known as the Broker Protocol. The protocol, which both LPL and Ameriprise belong to, explicitly allows departing advisors to take only client names, addresses, phone numbers, email addresses and account titles to their new firms.
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Ameriprise's initial complaint against LPL,
Sinquimani said LPL's bulk upload tool was used with former Ameriprise advisors between the beginning of 2018 and end of 2021. The practice was halted the following year.
"To my knowledge, and consistent with LPL's company practice, as of January 1, 2022, LPL has not provided the bulk upload tool or any similar tool to any Ameriprise recruit for the purpose of compiling information beyond that of the broker protocol," Sinquimani said.
In the public filing of Sinquimani's declaration, the names are blacked out for all 30 advisors she said imported information for former Ameriprise clients. But Ameriprise's lawyers provide a few more details in accompanying legal documents.
According to Ameriprise's chief legal counsel — Michael Taafe of Shumaker, Loop & Kendrick — Sinquimani's list names 30 advisors who worked with "4,500 Ameriprise customers whose accounts generated over $16 million in annual revenues for Ameriprise and over $1 billion in assets under management."
"Those thirty registered representatives removed confidential information pertaining to over 4,500 Ameriprise customers and impermissibly brought that information to LPL for competitive use against Ameriprise without the Ameriprise clients' prior approval," Taafe added.
An Ameriprise spokesperson said in a statement, "We've seen a widespread pattern where LPL allows, encourages and misleads its advisors to blatantly violate the protocol for broker recruiting, among other industry standards and regulations by harvesting and misappropriating Ameriprise's confidential client information and trade secrets."
An LPL spokesperson noted that recruits from Ameriprise used the bulk upload tool only after consulting outside lawyers and being counseled on what types of information they could legally retain.
Broker Protocol as a floor or ceiling
Ameriprise's filing comes a week after LPL submitted its own response to the initial complaint in the recruiting dispute. In a motion last week, LPL called Amerirprise's legal challenge
LPL's filing contended that independent broker-dealers have generally viewed the broker protocol as a "floor," setting a minimum for what sorts of information departing advisors can transfer to new firms. Ameriprise, LPL contended, is trying to treat the protocol like a "ceiling," setting an uppermost limit on what's fair game to take.
LPL said it first became aware of Ameriprise's position on the broker protocol in a 2021 Financial Industry Regulatory Authority arbitration hearing over a separate recruiting dispute. But Ameriprise's lawyer, Taafe, said in the response brief filed Thursday that it was only during those arbitration proceedings — over the departure of the
"In fact, Ameriprise only uncovered LPL's mass violations and misappropriation in June 2024, through discovery and investigation resulting from testimony in that Kodama matter," Taafe wrote.
Taafe said that even though LPL supposedly stopped using its bulk upload tool with former Ameriprise advisors in early 2022, Ameriprise has yet to secure the return of client data taken before then.
"This alone entitles Ameriprise to injunctive relief, as LPL has no entitlement to the information it obtained via the bulk upload tool," he wrote.
The free market?
LPL portrayed itself in its filing a week ago as a defender of a system that lets independent advisors who've worked hard to build a book of business easily affiliate with the firm of their choosing. But Taafe argued advisors' freedom to move their practices where they want shouldn't extend to confidential client information.
"LPL misses the point," he wrote. "It harps on about how these businesses exist in a free market, but it neglects to address the fact that misappropriation has no place in a free market."
The next hearing on Amerirprise's request for a preliminary injunction is scheduled for Oct. 31.
— This article has been updated with comments from Ameriprise and LPL.
