Ameriprise and LPL Financial have agreed to bring in a third-party forensic company to help preserve evidence in a wide-ranging recruiting dispute while they await a resolution from a FINRA arbitration panel.
In a judicial order approved Friday in federal district court in southern California, the two rival firms agreed to bring in a third-party firm to preserve any customer information LPL may have obtained by recruiting Ameriprise advisors.
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Ameriprise sued LPL in July over
Some of the people whose information was transferred ultimately became LPL clients while others remained with Ameriprise. Friday's order says a third-party company will now be responsible for finding client information on LPL advisors' personal devices and other data repositories and making "forensic copies" of it. The consultant will then erase the advisors' copies of the data.
LPL is also to conduct its own review of its data repositories and erase any non-customer information that's been retained after making forensic copies of it. An LPL executive testified in October that the firm's
LPL did not respond to requests for comment. An Ameriprise spokesperson called Friday's court order "a victory for clients and our industry."
"We're pleased the judge recognized LPL's ongoing practice of misusing private, confidential client information while recruiting advisors," according to the spokesperson. "Importantly, LPL has been called to account for violating multiple securities laws and regulations, as well as the industry standards for broker recruiting. We will continue to pursue our case on its merits in the ongoing FINRA arbitration given the strength of the facts."
