Edward Jones Broker Who Jumped to LPL Financial Agrees to Solicitation Ban
A Missouri broker who left Edward Jones two weeks ago to become an independent broker affiliated with LPL Financial has agreed to refrain from further calling his former clients for 16 months.
The handcuffs on restarting his practice were outlined in a stipulated order for preliminary injunction signed by Eastern District of Missouri Judge John A. Ross on Friday.
Stotler, who is based in the St. Louis suburb of Pacific, had transferred $7 million of his $44 million book to his new practice within ten days of his move, his former firm alleged in seeking its restraining order last week.
It accused him of using proprietary client contact information to make unsolicited telephone calls, social media messages and personal visits to his former clients in violation of a one-year non-solicitation clause in his employment contracts.
In the stipulation, Stotler said he had no “trade secrets” in his possession but agreed to return within two business days any confidential data he may have “inadvertently retained.” He also agreed to refrain from soliciting even clients who are his “close personal friends.”
Stotler, who represented himself in the case, did not respond to requests for comment.
“We are pleased that the Court upheld Mr. Stotler’s agreement to not solicit Edward Jones clients,” a Jones spokesman wrote in an email. “This helps to ensure that all Edward Jones client information is protected.”
He declined to comment on whether the St. Louis-based firm will continue to pursue damages against Stotler in a Financial Industry Regulatory Authority arbitration complaint also filed last week.
Thomas B. Lewis, a securities lawyer who primarily represents brokerage firms and executives, said the stipulation appears to be “more one-sided in favor of Edward Jones” than what Stotler agreed to in his initial employment agreements. “If Edward Jones believes that Stotler is doing something to violate this order, then Edward Jones has the ability to go back to the court and try to get some type of remedy.”
Lewis, a shareholder at the Stevens & Lee law firm in Princeton, N.J., also said it would behoove the broker to engage a lawyer if the Finra arbitration proceeds.
“There are some legitimate defenses available to him,” Lewis said, as well as the possibility of asking arbitrators to vacate or modify the consent order.
At the very least, he said, Stotler should seek a remedy that would require Jones to alert clients about his move. Finra last year published a regulatory notice obligating broker-dealers to give customers timely information about how their accounts will be serviced after a broker leaves and to provide complete answers about the broker, if known, if questions are asked.