LPL Financial has dropped a lawsuit that accused Ameriprise Financial of sending "false and defamatory” data breach notices to thousands of LPL clients — after the two financial services firms agreed that LPL could pursue such claims with the Financial Industry Regulatory Authority.
LPL contended that on April 8, Ameriprise sent the notices to thousands of unidentified clients, telling them that their financial advisors had accessed their data without authorization years ago when they left Ameriprise for LPL.
The case centered on 30 advisors who switched from Ameriprise to LPL from 2018 to 2021 while keeping customer information.
The court last week agreed to Ameriprise and LPL’s plan, in which LPL would dismiss the suit and the two firms agreed that LPL could pursue defamation and tortious interference claims against Ameriprise at FINRA.
Under the plan, LPL agreed to provide Ameriprise with a list of non-LPL customers whose information was obtained through a Bulk Upload Tool, and Ameriprise agreed to then provide LPL with names of people not on that list who were sent the data breach notices.
LPL also agreed to provide 48 hours' notice and a copy to Ameriprise of any LPL notice to clients regarding the data breach notice, for review and comments.
The two firms have been engaged in a separate, related legal case over data that the advisors took when they moved from Ameriprise to LPL. Ameriprise has pursued multiple complaints in court and FINRA over LPL's recruiting practices.
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