Regions Wins TRO Against $3.5-Mln RayJay Duo in Florida
A judge has granted Regions Bank a temporary restraining order preventing two brokers who were generating $3.5 million at the bank’s brokerage unit from calling former clients from their new desks at Raymond James Financial in Winter Park, Florida.
In granting the two-week TRO, the judge wrote that Regions was likely to succeed in its claims for a permanent injunction.
Regions had accused the brokers of sending client lists to their personal emails, and of presoliciting some clients while still with Regions. The brokers, with Raymond James’ support, also opportunistically arranged to move amid the coronavirus turmoil in hopes that courts would be preoccupied or closed, according to the TRO request that Regions filed on April 16.
“[B]y resigning during this volatile time, Regions also believes that defendants sought to take advantage of the limited court resources available in the event Regions were to enforce the Individual Defendants’ consent to injunctive relief,” Regions wrote.
Spokespeople at Raymond James and Andrew Froman, a Fisher & Phillips lawyer representing RayJay, did not return calls for comment.
Montalvo and Cárdenas oversaw $384 million of mostly Latin American client assets at Regions, the bank alleged. They had successfully moved two clients to Raymond James and dozen of others indicated they were likely to follow, according to the courtroom filing.
Raymond James purchased Regions’ core wealth business in 2012, and the bank’s remaining wealth advisors are registered representatives of Cetera Investment Services, LLC, an independent broker-dealer specializing in servicing bank- and credit union-based brokers.
A growing number of smaller regional brokerage firms and discount brokerage firms like Fidelity Investments and Charles Schwab that are not members of the Protocol for Broker Recruiting have been seeking TROs against brokers who move to full-service firms. The Protocol permits brokers joining signatory firms to take limited amounts of customer contact information with them when moving.
Regions and the other recent litigants assert in their complaints that their bank and service center brokers are more dependent on having clients referred to them from associates than are brokers who work in freestanding brokerage branches or who are trained to develop their own client relationships.
“The Individual Defendants…received referrals from the Bank’s branch network network, as well as commercial and corporate banking,” Regions complaint against the brokers and Raymond James said.
JPMorgan Chase & Co. last month succeeded in obtaining a TRO against a former Chase Private Client advisor in Baton Rouge, La., who allegedly solicited former clients to join him at Merrill Lynch in violation of his employment agreements.
Montalvo began his brokerage career in 2002 at SunTrust Investment Services, moved to Wells Fargo’s private bank in 2008, and spent less than a year at Allgen Financial Services before joining Regions in 2015, according to his LinkedIn profile.
Cárdenas started his career at Morgan Stanley in 2010, moved to Wells Fargo in 2012 and also worked at Allgen and Regions Bank in 2014 and 2015.