Fidelity Brokerage Services alleges a former vice president and financial consultant in its Highland Park, Illinois, office is misusing the company's confidential and trade secrets by soliciting customers to transfer their business to his new firm.
The financial services giant filed a complaint in U.S. District Court in Illinois' Northern District on Monday, seeking a temporary restraining order and preliminary injunction against Adam Ritter and an order compelling a Financial Industry Regulatory Authority arbitration.
Ritter, now a private wealth advisor at Cubit Wealth Management, which offers services through NewEdge Advisors, is soliciting Fidelity customers to transfer their business to NewEdge Securities, misusing confidential information he obtained through his Fidelity employment and engaging in unfair competition, the company alleges.
Fidelity contends Ritter's conduct breaches his Fidelity employee agreement and violates Illinois and federal law protecting the company's trade secrets regarding customers.
"After engaging in unprofessional conduct at Fidelity, Ritter was permitted to resign, and did resign, on December 19, 2024," the brokerage alleges in the complaint, noting that he joined NewEdge in April.
Ritter's FINRA BrokerCheck record doesn't cite any disclosures involving misconduct allegations or findings. Ritter was registered through Fidelity Brokerage Services for eight years before joining NewEdge, BrokerCheck shows.
"Despite his post-employment obligations, since joining NewEdge Ritter has aggressively and blatantly misappropriated Fidelity’s confidential and trade secret customer information and used, and continues to use, that information to unlawfully target and solicit Fidelity customers to transfer their accounts to his new firm," the complaint alleges.
Fidelity asks the court to require Ritter to return any records or documents he received or removed from Fidelity containing information about customers he served while at the company and to prohibit him from further client solicitation. "This injunctive relief is necessary to end Ritter’s unlawful activities, which include misuse of Fidelity’s trade secrets and unfair competition," the complaint states.
The company is also seeking binding arbitration with FINRA.
Unlike other firms, Fidelity, rather than making financial consultants make cold calls, instead requires them to develop service relationships through leads the company provides, the lawsuit states. "Fidelity’s success with its unique lead-based approach to supporting Financial Consultants, such as Ritter, is also directly tied to Fidelity’s trade secret customer information, which is among Fidelity’s most important assets," it says.
"Ritter specifically acquired access to and knowledge of the names, contact information and confidential financial data for hundreds of Fidelity clients with a total of over $1.4B dollars in assets under Fidelity administration," the company contends.
Ritter’s counsel responded to a letter from Fidelity this year stating that the consultant hadn't violated his legal obligations to Fidelity, according to the complaint.
Ritter didn't immediately respond to an email Tuesday seeking comment on the lawsuit.
Credit: Shutterstock
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.