Advisors at the center of the ongoing legal battle between Ameriprise and LPL Financial have filed a response to Ameriprise, accusing the firm of “mud-slinging” and ignoring the nuances in their request to pause the lawsuit.
Last week, 10 advisors asked the federal court to stay the lawsuit between the two broker/dealers while FINRA arbitrates the case. Those advisors, whose names were redacted in court documents, had argued in a motion that they were not party to an agreement between the two companies allowing their personal devices to be searched for evidence of client information.
“Ameriprise’s opposition is dripping with personal vitriol against the Intervening Advisors and contempt for their legitimate privacy interests,” the advisors wrote in their recent response. “Ameriprise compares the Intervening Advisors to criminals, calls them hypocrites and suggests that they deserve to be publicly shamed. But beyond mud-slinging and name-calling, Ameriprise offers no valid reason why the Intervening Advisors’ identities should be revealed in this proceeding.”
In Ameriprise’s response, the firm claims the public has a right to court records and that the advisors’ desire to avoid public attention does not trump that. It also argues that the advisors’ reasons to seal are not compelling.
Ameriprise also notes Federal Rule of Civil Procedure 10, which requires that complaints “must name all the parties.” But the advisors did not file the complaint; Ameriprise did.
“Throughout these proceedings—in court and in arbitration—Ameriprise has shown that it is hellbent on exacting revenge on the Advisors because they deigned to join a competing broker/dealer,” the advisors’ response stated. “Tarnishing the Advisors’ names in a public forum is a feature—not a bug—of Ameriprise’s litigation strategy. This court should not reward Ameriprise’s blatant gamesmanship.”
According to Ameriprise spokesperson Ali Mueller, LPL agreed to the order to search the advisors’ phones. “It is unfortunate that LPL’s unlawful recruiting practices put the advisors in this situation,” she said.
The motion is the latest development in a legal tug-of-war between the two firms. Ameriprise continues to submit restraining order requests that attempt to prevent advisors joining LPL from allegedly soliciting former clients. Meanwhile, LPL has claimed that Ameriprise is filing frivolous lawsuits and “chasing headlines.”
The scuffle between the firms got more heated last month when LPL argued Ameriprise had “sunk to a new low” by sending out “misleading” data breach notifications to frighten LPL customers. LPL agreed to dismiss the lawsuit this week.
In this ongoing suit, originally filed last year, Ameriprise accused advisors who left the firm of illegally retaining clients’ personal information on personal devices when they joined LPL. In an order from the court, both firms agreed to retain a “forensic examiner” to investigate the claim, including potentially searching advisors’ devices.
According to the latest motion, this left those unnamed advisors caught in the crossfire, as they hadn’t agreed to such a search. They claimed they had not taken any client information they were not allowed to, and whatever they took was with Ameriprise’s consent.
Additionally, the advisors noted that Ameriprise only pursued arbitration against them after the court order mandating the analysis of their personal devices. The advisors said Ameriprise wanted to obtain information through that search for the upcoming arbitration process.
“The advisors are being asked not only to hand over their personal property and to countenance an invasion of their privacy, but also to essentially permit Ameriprise an end-run around the arbitration process (including by obtaining intrusive and free-ranging discovery outside of arbitration),” the motion read.
According to a memorandum by an attorney representing the advisors, Ameriprise opposed the advisors’ motion to intervene, while LPL did not oppose the filing.