Ed Jones Restrains Texas Broker Who Set Up RayJay Shop Next Door
A federal judge on Monday granted Edward D. Jones & Co.’s request for a temporary restraining order against a Texas broker who it claimed improperly solicited his former customers to move with him to Raymond James and “physically locked out” Jones employees from the office it had leased from him.
“Unbelievably, Riggan erected a modular building, now being used as his new Raymond James office, abutting the Edward Jones office at issue,” Edward Jones said in its suit.
Judge James W. Hendrix in U.S. District Court for Northern Texas to “immediately cease all efforts of soliciting Edward Jones’s customers to move their accounts to Raymond James and to abide by all terms of his employment agreement.”
The broker, who Jones said managed about $500 million in client assets for 1,582 households, was also ordered to return to the firm “all records, information and/or documents in any form pertaining to customers or prospective customers of Edward Jones,” the judge wrote.
The restraints are in effect until a June 7 hearing on the brokerage’s motion to extend the TRO as a preliminary injunction.
“The court issued a temporary restraining order and determined the evidence supports our claim that the defendant violated the terms of his employment agreement with Edward Jones,” a company spokesperson said in an emailed statement.
Riggan’s lawyer, Peter S. Fruin with the Birmingham, Alabama law firm Maynard Cooper & Gale, declined to comment. Riggan, who started his career at Jones in 2005, according to his BrokerCheck report, did not return a request for comment.
Judge Hendrix wrote that Jones showed Riggan may have violated the terms of his employment contract, although he said Jones did not name the appropriate party for its breach of contract claim related to the lock out and lease agreement violation and therefore would not likely succeed in pursuing. He left open the possibility that Jones could refile and add other named defendants, including the business entity that Riggan co-owns and that owns the building.
The order also denied Jones’ request for Riggan to return office furniture saying that it likely was owned by Riggan.
Edward Jones, which is unique in its single-broker branch model, leased roughly 11% of its 14,700 branch offices from its financial advisors as of December 31, according to its most recent annual report.
Riggan, in a declaration filed prior to the judge’s order on Monday, denied the firm’s claims and said that he left Jones with the keys to the building upon his resignation. He alleged that Edward Jones had changed the locks on the building without approval from the leasing entity or notifying him personally.
Riggan’s attorneys called Jones’ pursuit of a TRO an “extraordinary and harsh remedy,” and argued there was no contractual violation or removal of trade secret or confidential information on Riggan’s part, according to a separate brief filed on Monday.
It also accused the St. Louis-based firm of hypocrisy in seeking the TRO.
“Mr. Riggan’s conduct is the exact same conduct that Edward Jones condones when it hires financial advisors from the competition,” the opposition brief said.
Moreover, Edward Jones had been unable to show that Riggan “misappropriated” any of its information or that he engaged in solicitation “because he did neither,” the same brief said.
Jones had claimed that Riggan, about a week prior to his resignation, printed two client lists containing the addresses, telephone numbers, and account information of his former customers. In bolstering its solicitation claims, the firm said Riggan told at least one client they would save 10% on fee-based accounts if they moved to Raymond James.
Edward Jones said in the complaint it has been operating out of the Snyder building since at least 2019 and had been timely with its monthly rent payments of $2,291 for the 1,200-square-foot office.
A spokesperson for Florida-based Raymond James, which was not named as a defendant in the suit, declined to comment.