LPL Financial is alleging that Amerprise sent unwarranted alerts of a "data breach" to thousands of LPL clients over past transfers of account information from Ameriprise.
Of its
READ MORE:
LPL contends that its clients began receiving data breach notices from Ameriprise on or around April 8. The notices state: "Your former Ameriprise Financial advisor left Ameriprise for LPL Financial during the period 2018-2020. In connection with that transition, your former advisor shared certain confidential personal information about you and your account(s) that exceeded the limited scope of information your former advisor was permitted to use for transition purposes."
LPL advisors, according to the suit, have since heard from clients who are afraid their confidential data may have been hacked. LPL said in its suit that it wants to provide reassurances to all of its investors who received a breach notice, but can't know whom to reach out to without obtaining a list of recipients from Ameriprise.
LPL, according to the suit, believes the notices went out to clients of roughly 30 advisors who had used what LPL calls "a bulk upload tool" to
LPL has said that client information its new recruits transferred fell within the limits laid out in Ameriprise's own documents that independent advisors have to sign. Even so, LPL ceased using its bulk upload tool with former Ameriprise advisors in 2022. The two firms
Despite that agreement, Ameriprise has since filed FINRA arbitration claims against the 30 advisors. Ameriprise is seeking to have them turn over any personal device they have used since leaving for the purpose of forensic examination. "This is far beyond … what LPL agreed to do, and represents a far-reaching and unnecessary intrusion of the advisors' privacy," according to the suit.
LPL said in its new suit that clients who consented to move their accounts over from Ameriprise knew exactly what sorts of information was being transferred. "Thus, LPL account holders clearly authorized their advisors to possess their information," the suit says.
LPL also pointed out that Ameriprise's data breach notice stated that, "Ameriprise recently became aware of" the disclosures and "wanted to notify you of the incident." LPL says that statement is false, since Ameriprise learned through litigation dating to 2021 exactly what sorts of information recruited advisors were taking to LPL.
"These notices misrepresent routine account transitions and falsely claim the advisors mishandled client personal information," LPL said in its statement. "This is a blatant and desperate attempt to instill fear and distrust in these investors and tarnish the reputation of their advisors. The fact that Ameriprise sent these misleading notices years after the clients transitioned their accounts only further underscores their lack of genuine concern for customer privacy."
LPL acknowledged in its suit that the Securities and Exchange Commission
— This article has been updated with comments from Ameriprise and additional context.
