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Regulation and Compliance > Litigation

JPMorgan Settles With Advisors Who Jumped to LPL-Affiliated Firm

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What You Need to Know

  • JPMorgan had sued five advisors who left it for LPL-affiliated Professional Wealth Advisors.
  • JPMorgan alleged the advisors improperly solicited its clients to move with them.
  • As part of a settlement, the TRO and preliminary injunction that JPMorgan obtained against the advisors have been lifted.

J.P. Morgan Securities has settled its dispute with the five advisors who the firm alleged improperly solicited its clients to move with them when they left JPMorgan and joined Professional Wealth Advisors, an LPL Financial network member firm, earlier this year.

As part of the settlement, both parties requested that U.S. District Court for the Northern District of Illinois, Eastern Division, “dissolve” the temporary restraining order and preliminary injunction that JPMorgan had obtained against the advisors.

Both sides also requested that the court release the $75,000 bond to JPMorgan that it had posted in support of the TRO and “dismiss this case with prejudice … with each side to bear his or its own attorneys’ fees and costs,” according to a motion for relief on Aug. 10.

U.S. District Judge Matthew F. Kennelly granted each part of the joint motion, according to an order on the motion for relief, also on Aug. 10.

LPL and the advisors did not immediately respond to requests for comment on Tuesday. JPMorgan and John S. Monical, a managing partner at the Chicago law firm Lawrence, Kamin, Saunders & Uhlenhop, who represented the defendants, declined to comment. LPL and PWA were not named as defendants in the complaint that JPMorgan filed against the advisors on April 19.

The TRO granted to JPMorgan by Kennelly on April 19 temporarily enjoined and restrained Brian Bellot, Scott Cimo, John Goblet Jr.Raymond Kermend and John Searer, “directly or indirectly,” from “soliciting, attempting to solicit, inducing to leave or attempting to induce to leave any JPMorgan client.”

The advisors were also temporarily enjoined and restrained from “hiring, soliciting, inducing or encouraging any current JPMorgan employee to leave JPMorgan or to apply for employment elsewhere,” and from “using, disclosing or transmitting for any purpose JPMorgan’s documents, materials and/or confidential and proprietary information pertaining to” the firm and its clients and employees.

The defendants had worked as private client advisors in Illinois JPMorgan bank branch offices: Bellot and Kermend in Wheaton, Cimo in Downers Grove, Goblet in St. Charles, and Searer in Carol Stream. The five are registered as advisors and brokers, according to their reports on the Financial Industry Regulatory Authority’s BrokerCheck website.

The firm alleged that, since their “sudden and coordinated resignations” from JPMorgan, on April 1 by Goblet and early April 5 by the other four advisors, and the “immediate commencement of their employment” with rival PWA, they started “soliciting JPMorgan clients to move their accounts from JPMorgan to them at PWA.”

 (Photo: Shutterstock)