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JPMorgan Sues Arizona Advisors For Allegedly Soliciting Clients

J.P. Morgan Securities filed a set of lawsuits in Arizona federal court to stop a number of former advisors for allegedly breaking nonsolicitation agreements after resigning and moving to new roles at Ameriprise and Wells Fargo.

According to the complaint seeking a temporary restraining order, Brian Armstrong and Samira Arikat “engaged in a coordinated resignation” from J.P. Morgan in mid-June, immediately joining Wells Fargo and operating out an office in Scottsdale, Ariz. 

The duo (who are married) had previously worked as a team of private client advisors for J.P. Morgan out of two Scottsdale bank branch offices, with Armstrong joining in 2007 and Arikat coming onboard in 2012. 

At J.P. Morgan, Armstrong and Arikat worked with Catherine Esparza and Michael G. Rosson Jr., two private client bankers, as well as JPMorgan Private Client Investment Associate Beth J. Michele. All three resigned to join Wells Fargo the same day as Armstrong and Arikat, according to the suit.

Esparza and Rosson worked on the bank side of the business, but J.P. Morgan argued they wanted to leave with Arikat because they had “frequent contact” with many of her clients. Michele had similar contact with many of Armstrong’s clients, according to the suit.

According to J.P. Morgan, the advisors had agreements prohibiting them from soliciting JPMorgan clients and employees for a year after leaving, while adhering to confidentiality agreements concerning client information. But J.P. Morgan argued the former employees were “aggressively soliciting” clients to join them at Wells Fargo and calling them on personal cell phone numbers. 

Some calls came before the duo even resigned, requesting meetings with clients, and telling them they could offer “lower fees, as well as different and superior services and products,” at Wells Fargo. In one case, a client said Armstrong told her Wells had a “better platform” for affluent clients, saying she felt “uncomfortable” when Armstrong solicited her because he was very “assertive” and “aggressive.”

Additionally, in the days prior to their resignations, Armstrong and Arikat accessed almost 100 client files on J.P. Morgan’s systems, according to the suit. On June 14 (the day before they resigned), the advisors accessed 44 client accounts, in many cases only for one or two minutes. On the day before, they accessed 36 accounts for similarly short periods of time. These screens included client information, including names, email addresses, phone numbers and account balances, and J.P. Morgan believed the duo brought this information with them to Wells Fargo.

“As Armstrong and Arikat were mere days away from resigning and joining Wells Fargo, there was no legitimate business reason for Armstrong and Arikat to access and view such a large volume of client information,” the complaint read.

To date, about nine J.P. Morgan clients have said Armstrong or Arikat solicited them, and about 80 client households that were serviced by the advisors during their time at J.P. Morgan have moved to Wells Fargo, with more than $95 million in assets.

“Unless defendants’ conduct is immediately enjoined, defendants will remain emboldened and will continue to engage in their rampant misconduct, and J.P. Morgan’s other employees will be encouraged to engage in the same improper conduct,” the complaint read.

When reached for comment, Wells Fargo Advisors VP Jackie Knolhoff said the firm was “pleased to welcome Samira Arikat and Brian Armstrong to Wells Fargo Advisors.”

J.P. Morgan lobbed similar accusations in a lawsuit calling for a temporary restraining order against Arizona broker Seth Chamberlain, who it said broke a nonsolicitation agreement after resigning from J.P. Morgan Securities to move to Ameriprise. 

According to the order, Chamberlain was a private client advisor based out of Mesa, Ariz., and had been with J.P. Morgan or its predecessors since 2005 before resigning on May 27, 2022. However, J.P. Morgan learned from more than a dozen clients that Chamberlain had called them wanting to discuss his move to Ameriprise, and in some instances directly asked them to move their business with him to the new firm.

In one instance, Chamberlain told a client he could offer a discount to move to Ameriprise, while in another case, the client told J.P. Morgan that at Ameriprise, Chamberlain promised he could now sell “real products” that J.P. Morgan lacked (both clients ultimately transferred their accounts to Amerprise, according to the suit).

“Several J.P. Morgan clients have reported to J.P. Morgan that (Chamberlain’s) ‘pitch’ includes touting more ‘flexibility’ concerning individual stock trades (which makes no sense), and “better products” at Ameriprise to meet their needs,” the order read.

Like Armstrong and Arikat, J.P. Morgan also accused Chamberlain of taking confidential client information, including cell phone numbers, in order to solicit clients when at Ameriprise. But J.P. Morgan worried the efforts were proving successful; at this point, 66 clients with assets around $53 million had moved their accounts to Ameriprise and Chamberlain. (Amerirprise said it was not in a position to comment since it was not a party in the suit).

Last week, J.P. Morgan filed suit in Michigan federal court accusing a former broker from violating a nonsolicitation agreement, attracting more than $20 million in business to join him at Stifel.

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