LPL Financial is accusing Ameriprise Financial in a new lawsuit of sending thousands of LPL customers "false and defamatory" notices that their data has been stolen.
The suit, filed Monday in the U.S. District Court for the Southern District of California, asserts that a Notice of a Data Breach sent by Ameriprise is a "dangerous escalation" in a recruiting dispute between the two companies. At issue, according to the suit, is the departure between 2018 and 2021 of 30 advisors who left Ameriprise for LPL.
On or about April 8, Ameriprise sent a notice "to thousands of (as-yet unidentified) LPL account holders informing them that, years ago, their advisors accessed their information without authorization in connection with their transition from Ameriprise to LPL," the suit states.
"Ameriprise's Notice further asserts that these account holders are now years later, at risk of, and should monitor for, unauthorized transactions in their account and identity theft," according to the suit.
These statements "are false and defamatory," LPL states in the suit. "Account holders are plainly not at risk of identity theft from their own LPL financial advisors. Nonetheless upon receipt of the Notice, account holders are now calling their advisors, worried that their data has been hacked."
In a statement shared with ThinkAdvisor on Tuesday, LPL stated that "Ameriprise has sunk to a new low by sending misleading data breach notices to investors whose advisors left Ameriprise for LPL. These notices misrepresent routine account transitions and falsely claim the advisors mishandled client personal information. This is a blatant and desperate attempt to instill fear and distrust in these investors and tarnish the reputation of their advisors."
Shifting the Narrative
Ameriprise countered in a statement shared with ThinkAdvisor on Tuesday that, "once again, LPL is trying to shift the narrative away from its misconduct instead of focusing on what matters most — protecting clients and their sensitive data. Let’s be clear — the steps we took to inform impacted individuals their data had been compromised were completely lawful and contemplated by a federal court order to which LPL agreed."
LPL states in the lawsuit that it "needs to immediately know which customers Ameriprise sent the Notice to and what Ameriprise told them about the safety and security of their data."
Ameriprise "has refused to disclose to LPL who it sent the Notice to, or even what specifically the Notice said about the data that was purportedly 'compromised,'" the lawsuit states.
Because Ameriprise "refuses" to provide the list of clients, LPL states that it is urgently seeking relief from the court to order Ameriprise "to immediately provide the requested information," and "to enjoin Ameriprise from sending any additional false communications to LPL account holders."
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