Ameriprise Fights LPL Advisors' Request to Block Device Search

"LPL and its advisors’ misconduct impacted at least 4,500 individuals," Ameriprise contends in its filing. "Some of this Ameriprise confidential client information still resides on the systems and devices of LPL and its advisors."

LPL initially refused to rectify the misappropriation, Ameriprise's filing states, and LPL was eventually "forced to admit to its wrongdoing and identify the advisors who misappropriated the Ameriprise confidential client information."

After the court noted it would use a “blunt instrument” if LPL did not work with Ameriprise to create a “fine-tuned and tailored” solution, LPL and Ameriprise agreed to a “Stipulated Order.”

However, LPL has since refused to uphold the order, according to Ameriprise.

The advisors' attempt to intervene "further delays our efforts to protect clients’ confidential and most sensitive data and raises additional questions about what the parties might be withholding," Ameriprise said in its statement.

Move Forensic Review to FINRA

In its filing, LPL said that it agrees that the advisors may intervene.

The advisors "have their own property, privacy, and due process interests that deletion of information from their personal devices implicates," LPL states in its filing. "And their motion to intervene is timely: it works no prejudice on any party (and especially not on Ameriprise, whose own actions have—in part—led to their intervention)."

LPL said it "also agrees with the propriety of a stay. FINRA Rules require arbitration of the parties’ dispute, and the Federal Arbitration Act requires that this case be stayed in its entirety pending that arbitration. Moreover, staying the case would not endanger the goal that led to the Stipulated Order."

In a statement shared with ThinkAdvisor Monday, LPL said that it "continues to stand behind advisors in championing independence. We support the advisors being targeted by Ameriprise in their very reasonable plan to move the forensic reviews to FINRA arbitrators. The plan put forth by the advisors achieves the goal of the stipulated order and respects the advisors’ privacy and due process rights."

LPL added: "Ameriprise's refusal to negotiate in good faith reveals that its true purpose in this litigation is not to protect any legitimate privacy concerns but to punish advisors seeking true independence.”   

A 'Narrow Search'

The anonymous advisors "have failed to demonstrate that they have any protectible interest here," Ameriprise states in its filing.

The assertions made by the anonymous advisors in their motion "are plainly false — they are not being asked to 'hand over' their personal devices; instead, the independent forensic examiner offers 'mobile device kits' that they will send to the Anonymous Advisors, and the forensic examiner will remotely create forensic images using those kits," the Ameriprise filing states.

"The forensic examiner is not looking for family photos — that is a red herring argument," Ameriprise states.

LPL and Ameriprise instead "contemplate a narrow search for only customer and non-customer information on these devices, and even then, only on devices (or repositories) which the Anonymous Advisors certify were used to store, access and/or transmit customer and/or non-customer information that was used to populate the Bulk Upload Tool."

The anonymous advisors "do not have a property interest in the sensitive information of others, which includes the sensitive personal data of individuals who are not even their customers, and the process of searching for, preserving, and deleting the information these Anonymous Advisors are not supposed to have is minimally invasive," Ameriprise states.

"LPL’s limited proposal — to delete only the spreadsheet that aggregated all the misappropriated data — is a half measure that falls far short of meeting the objective set forth in the Federal Court order," Ameriprise maintains.