J.P. Morgan Chases Another Bank Broker Who Joined LPL
JPMorgan Chase & Co. has returned to court to keep a former bank-based broker who joined LPL Financial from reaching out to his former clients.
Browne, a registered rep for 20 years, moved to LPL-affiliated Advisors Resource Council/Faubourg Private Wealth, a hybrid RIA founded by a former J.P. Morgan bank advisor in Metaire, on February 4, according to his BrokerCheck record.
Browne allegedly promised customers lower fees and more personal attention than he was able to give them while working at the bank, according to the complaint, which asked the court to issue a temporary order restraining the broker from further contact pending resolution of a parallel Financial Industry Regulatory Authority arbitration complaint it has filed.
The advisor had convinced “approximately five JPMorgan clients/households” to move $2.8 million between his February 2 departure and yesterday’s legal filing, according to the complaint. Browne had been working with 323 clients who kept $145 million at JPMorgan, it said.
Browne, who had been at J.P. Morgan Securities and predecessor Chase Investment Services since 2006, declined to comment on the allegations. Spokespeople for LPL, the largest independent broker-dealer by its more than 17,000 brokers, did not immediately return requests for comment.
The case is at least the second that J.P. Morgan has filed this year against bank-branch-based brokers who it says owed their book-building primarily to referrals from commercial bankers rather than through their own efforts. The strategy of rushing to court to handcuff brokers in the crucial first few days following their departure was traditionally practiced by large full-service brokerage firms, but bank-owned brokers and discount firms such as Charles Schwab and Fidelity Investments have in recent years adopted the strategy as competitors target their advisors.
J.P. Morgan last week won consent from a New Jersey advisor who joined Merrill Lynch and had been managing about $143 million to stop soliciting former clients, pending arbitration results.
Browne, who has no disclosures on his BrokerCheck record, began his financial career with Barclays Bank as an operations specialist and first registered as a securities rep with New Orleans-based Hibernia Investments in 1999, according to his online biography at Faubourg, and BrokerCheck. He joined Legg Mason in 2001 as an advisor and also worked at Becker & Suffern for three years prior to joining Chase in July 2002.
“[T]he boutique firm environment allows him to be exceedingly responsive to his client’s needs in our ever-changing economic times, without the constraints of a corporate agenda,” Browne’s Faubourg biography says.
J.P. Morgan Securities excludes its bank branch-based brokers from the protections of the Protocol for Broker Recruiting, which allows advisors joining other signatory firms to take some client-contact information with them. Browne’s employment agreements allowed him to contact customers he had introduced to J.P. Morgan from former firms, but he did not provide any names as part of a 2013 update he signed, according to the court filing.
“Although Defendant had some limited prior industry experience before joining JPMorgan, on information and belief, he brought no clients with him to JPMorgan,” the complaint said.