Facebook Post Trips Up JPMorgan Private Bankers Who Jumped to Wells
A raiding case that JPMorgan Securities has filed against a pair of private bankers in Oklahoma who allegedly managed $1 billion highlights the dangers of using social media, attorneys say.
Laurisa Anderson and Steven Remchuk violated their client non-solicitation agreements when they jumped to Wells Fargo in August by embarking on “an aggressive campaign of calls, emails and personal contacts” that violated their client non-solicitation agreements, JPMorgan argued in a complaint filed on September 8 in U.S. District Court in the Northern District of Oklahoma.
“I look forward to working with all of my old and new clients that I built relationships with for the last 30 years!!!!” Anderson wrote on a Facebook posting the day she left, according to the lawsuit.
Reached at her Wells office, Anderson dismissed JPMorgan’s claims about client solicitation violations as having “no merit.” The Facebook post, in particular, was made on her personal account to people she had authorized and was not a marketing effort.
Judge John E. Dowdell, however, issued a temporary restraining order prohibiting Anderson and Remchuk from soliciting additional clients and requiring them to return any client data they may have removed to JPMorgan, which is seeking a permanent injunction and damages in a Financial Industry Regulatory Authority arbitration hearing.
The court order should remind brokers how carefully they have to tread when using social media, even after they leave firms.
“A lot of courts would say that merely announcing that leaving one place and going to another would be okay,” said Allison Beatty, an employment lawyer at Marshall Dennehey in Philadelphia, who is not involved in the case. But Anderson’s mention of old and new clients and other messages that could be considered self-endorsements appear to cross the line, she said.
Kristin Andree whose Alpharetta, Ga.-based company advises firms on social media marketing said she had not seen a case where a firm took issue with a departing advisor’s social media account and that she was surprised the temporary restraining order was granted.
“It makes you think before you post,” Andree said. “This seems very much like a benign announcement.”
Even though Facebook is a so-called personal site where viewers have to be approved by the message-writer, the pair have little protection, the bank argued. The firm also excludes its private bankers from its Broker Protocol membership
“Anderson is Facebook ‘friends’ with many of her clients, making this posting a direct solicitation and violation of her Agreement, rather than merely an announcement of her new position,” the bank wrote in its complaint.
“Everyone does the same thing,” groused Anderson, who who has been with JP Morgan Securities and predecessor bank-owned firms since 1997, and who is allowed to work with former clients who contact her voluntarily under the order. “I was excited about a new job.”
Decisions on what words constitute a solicitation varies by state and by judge or arbitrator, Beatty said.
Brokers who move among firms that have signed the Protocol are protected from solicitation violation claims if they take a limited amount of client-contact data and follow notification rules to their old employers. But those outside the protocol protections are more vulnerable.
JP Morgan’s employment agreements restrain private bankers from soliciting clients for one year. It also asks brokers to provide notice 60 days before resignation,according to the complaint.
JP Morgan Securities appears to have escalated its battle against its former employees by using the word “raid” in its court papers, a word that lawyers said generally describe a claim involving recruitment of one-third or more of a branch or a firm’s production. Within 10 days of Anderson and Remchuk’s resignations from a bank branch in Tulsa, six additional private banking employees in that city and in Oklahoma City resigned, the complaint said. The departures together totaled 80% of its local wealth management group, JP Morgan said in the complaint.
It could not be determined if Wells Fargo itself is named in the arbitration claim that was filed simultaneous with the request for a restraining order. Anderson said she and Remchuk had “nothing to do” with the other advisors who left.