JPMorgan Seeks TRO Against Bank Broker Who Joined Wells Fargo
For at least the second time this year, JPMorgan Chase & Co. has gone to court to prevent client defections by suing a former bank branch advisor–this time, one who joined Wells Fargo Advisors in Coral Springs, Florida.
With its lawsuit, the bank’s broker-dealer, also known as J.P. Morgan Securities, asks the court to issue a temporary restraining order and permanent injunction barring Gomez from soliciting its clients and using customer contact information. The restrictions would be in place until a parallel claim that JPMorgan has filed against Gomez with Financial Industry Regulatory Authority is resolved.
Gomez did not respond to requests for comment sent through his LinkedIn page. A Wells Fargo spokeswoman said she could not immediately comment.
JPMorgan said in its complaint that Gomez has persuaded at least eight clients representing $2.9 million in assets to move with him to Wells Fargo. At the time he bolted, Gomez was serving approximately 300 clients with $110 million in assets, the lawsuit said.
Gomez had worked for JPMorgan and its Chase Investment Services predecessor since 2010, according to his BrokerCheck record. Before that, Gomez worked at Morgan Stanley and ADP Broker-Dealer, each for three years, according to the database.
“At least two JPMorgan clients informed JPMorgan that Gomez’s ‘pitch’ is that he wanted them to move their accounts … because Wells Fargo has better offerings and better fees,” the lawsuit said.
One customer told JPMorgan that Gomez claimed “most clients” are moving to Wells with him, the lawsuit alleges. His “hands” were “tied” at JPMorgan in terms of providing investment advice, Gomez told another client, according to the lawsuit.
The case comes two months after JPMorgan sued another bank-based broker Michael Bale in Park Ridge, New Jersey, after he allegedly transferred just three clients and around $4.3 million of the $143 million in assets he had managed to Merrill Lynch.
Within days of JPMorgan filing the lawsuit, Bale agreed to a stipulated temporary restraining order barring him from soliciting the clients in question, according to a court order.
JPMorgan has stepped up its enforcement of its non-solicitation agreements as Wells, Merrill and other large brokerage firms have shown increased interest in recruiting bank-based brokers, lawyers have said.
But the bank lost a separate attempt last year when a federal judge in Michigan dissolved a TRO she had issued against a former Chase Bank broker who had joined Ameriprise Financial, ruling that J.P. Morgan failed to prove it would suffer “irreparable harm” from the broker’s solicitation attempts.
J.P. Morgan Securities, the bank’s broker-dealer, and Wells Fargo are members of the Protocol for Broker Recruiting, which allows brokers to take limited client contact information when joining signatory firms. But JPMorgan excludes bank branch brokers from the pact’s protection. It only applies to the legacy Bear Stearns brokerage of around 450 advisors it inherited during the 2008-2009 financial crisis.