Fidelity Accuses Ex-Exec of Stealing Clients, Trade Secrets for Merrill

July 29, 2020

Fidelity is suing Merrill Lynch and a former Fidelity executive it says poached clients and stole trade secrets on behalf of the wirehouse.

Ryan Dolar, a financial consultant and VP at Fidelity Brokerage Services from November 2016 through June of this year, allegedly tried to lure Fidelity clients to Merrill after becoming an advisor there. In doing so, he violated his employee agreement as well as the Defend Trade Secrets Act, FA-IQ sister publication Ignites writes, citing court documents.

In all, Dolar’s actions could compromise 449 client relationships and cost Fidelity close to $357 million, Fidelity argued in a July 22 filing with Georgia’s Northern District court. 

The suit also names Merrill Lynch as a defendant, Ignites reports.

Once he started at the wirehouse, Dolar allegedly told one Fidelity client that he would be able to get her a lower fee for her portfolio at Merrill, according to Ignites' reporting. He also told her that he helped her late father set up the portfolio, according to the court filing cited by the publication.

Dolar allegedly suggested that another client follow him to Merrill Lynch on the grounds that his Fidelity replacement would be a new hire, Ignites reports.

Fidelity claims that Dolar’s agreement stipulated that he would not “directly or indirectly” solicit former clients, nor take proprietary information after leaving the firm, the publication writes. 

“Regarding this case, Fidelity takes the protection of our customer information seriously,” a company spokesperson told Ignites. “When necessary, Fidelity takes legal action in court and through Finra arbitration to further protect customer information.”

In his response, Dolar argued that he doesn’t remember signing anything that laid out restrictions or obligations about such communications once he quit Fidelity, and that his actions didn’t violate his contract with the firm, Ignites reports. He is represented by R. Harold Meeks, partner at Taylor English Duma, Ignites writes. Dolar also says that Fidelity tried to discredit him with his clients, telling them that he had left the industry once he resigned, according to the publication. 

Fidelity seeks Finra arbitration as well as a federal court injunction in a bid to recover monetary damages, stop Dolar from contacting his former clients and force him to return documents it says contain trade secrets, Ignites writes. 

Merrill Lynch declined comment to Ignites.

 John Stapleton of Fisher Phillips, who represents Fidelity in the matter, didn’t respond to the publication's request for comment. 

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By Alex Padalka
  • To read the Ignites article cited in this story, click here if you have a paid subscription.