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Regulation and Compliance > Litigation

Fidelity's Poaching Complaint Against Former Advisor and UBS Is Dismissed

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What You Need to Know

  • Fidelity sued an advisor and UBS, the firm he left Fidelity for, alleging its former employee was poaching clients.
  • The advisor agreed to stop soliciting Fidelity clients.
  • The advisor also agreed to return Fidelity client and trade secret information.

A complaint that Fidelity Brokerage Services filed last month against one of its former advisors and UBS Financial Services, for which he left Fidelity and was accused of poaching clients, has been dismissed.

In the suit, filed June 6 in U.S. District Court for the Southern District of Florida in West Palm Beach, Fidelity said it sought injunctive relief against former employee Ryan Shippy and his new employer, UBS, and an order compelling arbitration before a Financial Industry Regulatory Authority arbitration panel.

“Shippy is presently soliciting Fidelity customers to transfer their business to his new firm and misusing Fidelity’s confidential and trade secret customer information, which he obtained knowledge of and access to as a result of his employment with Fidelity,” according to the complaint.

“Shippy’s conduct, among other things, breaches his Employee Agreement with Fidelity and violates Florida and federal law protecting Fidelity’s trade secret information, and upon information and belief, Shippy has engaged in this misconduct with the encouragement and assistance of UBS,” Fidelity alleged.

Shippy was with Fidelity from 2014 until early January 2022, when he left to join UBS, according to his report on FINRA’s BrokerCheck website.

On June 16, defense counsel indicated they opposed the plaintiff’s motion because they “intend to present a proposal to Fidelity that would terminate the need for further proceedings before this Court,” according to a court filing.

As part of a proposed stipulated injunction order agreed to by all parties in the case, Shippy agreed to stop soliciting Fidelity’s clients and agreed to return Fidelity trade secret and confidential information, including client information, according to a June 22 court filing.

The order “shall remain in full force and effect until” Jan. 12, 2023, according to the filing. That date will be one year from the day Shippy resigned from Fidelity.

Judge Donald M. Middlebrooks signed off on the proposed agreement one day later, a June 24 court filing showed.

Commenting on the dismissal Wednesday, a Fidelity spokesperson told ThinkAdvisor: “Fidelity takes the protection of our customer information seriously and has policies in place to ensure that protection, including when associates entrusted with customer information separate from Fidelity. When necessary, Fidelity takes legal action in court and through FINRA arbitration to further protect customer information.”

UBS, Shippy and Eric Coleman, an attorney with the law firm Akerman LLP who represented Shippy, did not immediately respond to requests for comment.

(Image: Shutterstock)