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JPMorgan’s $1.5M Claim Against Reps Who Left for Raymond James Denied

By Alex Padalka October 27, 2020

JPMorgan has lost an arbitration claim against three of its former registered representatives who bolted for Raymond James in Indiana.

JPMorgan filed a claim against Nathan Shields, Mark Obrzut and Jackson Stewart in September 2018 following their departure to Raymond James the previous month, according to a Finra arbitration award document published last week and the representatives’ BrokerCheck profiles.

JPMorgan asserted breach of contract, misappropriation of trade secrets and confidential information, breach of fiduciary duty and more, claiming “improper solicitation” of JPMorgan clients and improper removal of confidential information to bring to Raymond James & Associates, which was also named in the arbitration claim, Finra says.

The claim sought a permanent injunction enjoining the reps from soliciting any JPMorgan clients through Aug. 3, 2019, and using the firm’s purported proprietary information, as well as the return of all documents pertaining to the firm and its clients, according to the award document. The company also sought $1.16 million in compensatory damages, $370,000 in attorneys’ fees and punitive damages to be determined by the Finra arbitration panel, the industry’s self-regulator says.

The registered representatives, in their counterclaim, denied the allegations and in turn accused JPMorgan of “defamation, tortious interference with business relationships, and unfair competition,” alleging that the company “launched a campaign to destroy their careers in the financial services industry, as well as their personal reputations,” according to the award document.

The representatives also sought up to around $132,000 compensatory damages for Shields, up to around $303,000 in compensatory damages for Obrzut and approximately $585,000 in attorneys’ fees and costs, Finra says.

JPMorgan eventually withdrew its request for a TRO and the parties agreed to a preliminary injunction, but the remaining issues and damages remained open, according to the award document. The panel then held hearings via Zoom last month and on October 16, Finra says.

Last week, the arbitrators denied JPMorgan’s claims in their entirety, but also denied the registered representatives’ counterclaims, according to the award document. The panel also ordered JPMorgan and the respondents to split the $23,625 hearing sessions fees, with JPMorgan paying $11,812.50 and the representatives paying the other half, Finra says.

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Tags:  Finding and winning new clients , Client retention , Staffing and recruiting , Regulatory/legal issues , JPMorgan , Raymond James , Raymond James & Associates

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