A federal judge has smacked down
Judge Susan Brnovich of the U.S. District Court in Arizona rejected Ameriprise's request for a temporary restraining order and preliminary injunction on LPL after finding Ameriprise had failed to furnish evidence that it was in danger of suffering irreparable harm, among other things. Brnovich's order arose
Ameriprise accused the team, which previously managed $345 million in client assets and generated $2 million a year in revenue, of violating its contract with the firm and various industry standards and rules by printing more than 8,800 pages of documents containing allegedly confidential client information. Ameriprise alleged the Jackson Roskelley advisors were planning to use that information to solicit clients in violation of a voluntary industry pact known as the Broker Protocol.
The protocol — which both Ameriprise and LPL have agreed to abide by — allows advisors to use five types of information to encourage former clients to come with them to a new firm: client names, addresses, phone numbers, email addresses and account titles.
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Brnovich found that Ameriprise never furnished any evidence that the documents were actually going to be used for solicitation purposes. She also said Ameriprise hadn't shown that LPL had encouraged the departing advisors to bring confidential information with them in violation of the Broker Protocol.
"Ameriprise makes no factual allegations to support its assertions that LPL encouraged the Individual Defendants to solicit clients or to improperly retain client information, nor has it made any factual allegations that LPL continues to do so," according to Brnovich's decision.
Ameriprise had sought a restraining order and injunction in part to prevent LPL and the Jackson Roskelley team from soliciting clients while it pursued a resolution to the recruiting dispute before a Financial Industry Regulatory Authority arbitration panel. A spokesperson for Ameriprise said Wednesday that Brnovich's order merely shows that arbitration is the proper venue for the firm's complaints.
"We look forward to presenting the overwhelming evidence to a panel of experienced FINRA arbitrators," according to the spokesperson.
An LPL spokesperson hailed the court's decision to deny LPL's request "in its entirety."
"It is evident from the ruling that the court saw through the baseless claims brought by Ameriprise and that their attempts to strip independence from advisors by claiming ownership of their books were denied," LPL said in a statement. "True independence prevailed here; we remain confident it will in future matters."
Sharron Ash, chief litigation counsel at the Hamburger Law Firm, said obtaining a restraining order is required under FINRA rules to obtain an expedited hearing before an arbitration panel. Without the restraining order, Ameriprise can still proceed with its dispute before arbitrators, and Ash expects it will.
A resolution will just take longer to obtain, she said. Ash said most disputes like this one are settled before resulting in a final arbitration decision.
"We'll see, but most of these cases don't even go all the way to a hearing," she said.
Ron Edde, an industry recruiter and the president and CEO of
"I find it particularly unusual when protocol firms do this, and this is one of those instances," Edde said. "There could be, I think, some firms that do this routinely to dissuade other advisors from leaving."
The Broker Protocol and client information
In their own affidavits, the three principals at Jackson Roskelley — Jared Roskelley, Matthew Tinyo and Kyle Robertson — said they had a simple reason for printing thousands of pages of customer information shortly before leaving. They said they were merely maintaining their long-standing practice of mailing their clients a six-page quarterly report and newsletter. The brokers said they told Ameriprise about the reports when they joined.
Brnovich again found that LPL had furnished no evidence that the trio had used the information for any purpose other than the quarterly communications. Ameriprise speculates that the advisors kept the data in order to solicit their former clients after joining LPL, but it offered no proof in support of that assertion, Brnovich wrote. The defendants in fact had told Ameriprise of their plans to send the quarterly reports.
"Here, the Individual Defendants had permission to share information with their clients and there is no direct evidence that they had an expectation that they would recapture the information upon joining LPL," the judge wrote. "Ameriprise simply speculates that its assertions are true without factual support."
Ash of Hamburger Law noted that Ameriprise went so far as to learn the weight of the documents the departing team had printed out and compare that with the weight of the pieces they mailed out. Ameriprise argued the lighter weight of the mailed-out materials suggested the departing advisors had kept some documents for themselves.
Judge Brnovich questioned that contention, though, noting that Ameriprise's examiner had only looked at pieces with United Parcel Service labels, omitting anything sent by the U.S. Postal Service. Ash said the arguments show just how far firms are willing to go to prove departing advisors have made off with information they have no legal claim to.
"What really jumped out at me was, 'Wait, they were weighing the paper here,'" Ash said. "I think reps will often ask, 'Where is the line, and what are the kinds of things that firms will look at?' This really lays out in such detail the lengths they will go to."
One member of the advisory group, Jared Roskelley, was also alleged to have told a client of his intent to leave Ameriprise before actually departing and to have encouraged her to wait to open a 529 plan — used for college savings — until after he had made the move. Ameriprise alleged that discussion was in breach of a Broker Protocol rule prohibiting advisors from soliciting clients for a new firm before they have even moved.
The defendants did not dispute that claim in their affidavit, Brnovich noted in her order. But Ameriprise nonetheless made no attempt to show that its allegations about inappropriate client solicitation were directed only at one member of the Jackson Roskelley team, rather than all three.
"The Protocol would still protect Robertson and Tinyo," according to the order. "Therefore, the Court finds that Ameriprise has failed to carry its burden in showing a likelihood of success on the merits of its claims."
Among the various criteria plaintiffs must meet to win a temporary restraining order, they usually have to show they will suffer irreparable harm without an immediate legal intervention. Brnovich said Ameriprise failed to cross that bar in this case in part because its participation in the Broker Protocol is an acknowledgement that advisors frequently change firms in the wealth management industry.
Ameriprise's membership in the protocol also means that any client list the departing team may have taken with it cannot constitute a legally protected "trade secret," Brnovich wrote.
She found that "the Protocol enables financial advisors to move between firms and take client lists, allows them to utilize client lists, and provides protections for a client's privacy interests in her sensitive information."
The defendants argued that almost all of the clients they worked with at Ameriprise were with them before they joined that firm in October 2023. Roskelley, for instance, had 200 clients and $275 million in assets under management he had accumulated over the course of a 23-year career. The defendants said they decided to leave Ameriprise after barely more than a year after finding it "was not a good fit for them or their clients."
Recent litigation from Ameriprise
Ameriprise has enjoyed some success in previous recruiting lawsuits filed against LPL. Ameriprise
A spokesperson for Ameriprise said, "While LPL may be content to expose advisors to the significant risks involved in such egregious violations, Ameriprise is committed to protecting its clients' confidential information and supporting the efforts of our advisors and recruits to do the same."
— This article has been updated with comments from legal and recruiting experts.
