Edward Jones has reached a confidential agreement with one of its former financial advisors whom the firm accused of taking client information and locking the firm out of its own office.
Last month, Edward Jones filed a suit before the U.S. District Court for the Northern District of Texas, Lubbock Division, accusing Russell Ryon Riggan of unlawfully soliciting its clients when he left unexpectedly for Raymond James. The suit also alleged that Riggan “physically locked out Edward Jones from the office space” in the Snyder, Texas, building that Riggan owns and in which Edward Jones has been operating since at least 2019 under a lease from "RhettKyn LLC/Riggan.”
Edward Jones sought a temporary restraining order and temporary injunction to force Riggan to unlock its office space, return what the firm claimed were its trade secrets and confidential information in the office or otherwise in his possession or control, and stop using the information to solicit Edward Jones customers.
Edward Jones also said that it was filing an arbitration claim with the Financial Industry Regulatory Authority’s arbitration forum.
Peter Fruin, a lawyer at Maynard Cooper & Gale, which is representing Riggan and RhettKyn, previously told FA-IQ that the law firm filed "a declaration, a supplemental declaration, an opposition and a supplemental opposition,” arguing that Edward Jones had changed the locks where the documents in question were located, and were not in Riggan’s possession.
On May 24, U.S. District Judge James Wesley Hendrix partially granted Edward Jones’ TRO request, "pending a hearing on the plaintiff’s motion for preliminary injunction." The judge ordered Riggan to “immediately cease all efforts of soliciting Edward Jones’ customers to move their accounts to Raymond James and to abide by all terms of his employment agreement” and return to the firm “all records, information and/or documents in any form pertaining to customers or prospective customers of Edward Jones.”
On June 3, Edward Jones and Riggan reached a confidential agreement related to their claims and asked Judge Hendrix to cancel the preliminary injunction hearing scheduled for Monday, according to a court document filed by Kuchler Polk Weiner, the law firm representing Edward Jones.
“However, this resolution does not apply to claims involving Defendant RhettKyn, LLC (“RhettKyn”) and Edward Jones,” according to the document. “The Motion for [TRO] filed by Edward Jones as it applies to Defendant RhettKyn is not impacted by this resolution.”
Spokespersons for Edward Jones and Raymond James, whch is not a defendant on the lawsuit, declined comment on the agreement. Fruin did not respond to FA-IQ's request for comment.
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Former Jones Lifer
Jun. 8, 2021 at 11:38 AM EDT
Thanks for the update! The future of financial advice is online and on-demand. It will be interesting to witness how Ed Jones's business model of the local branch will adapt to the new "work from anywhere" world. The brutal fact is that their branch office service model is too high-cost for the new age of Zoom videoconferencing and online trading & financial planning. Furthermore, automation replacing human workers is the trend for the foreseeable future. The world's first cashier-less grocery store is opening today. We are already seeing robotic restaurant servers and driverless taxis. If I'm a BOA at Ed Jones, I'd be planning for a new career and soon.
Jun. 8, 2021 at 05:06 PM EDT
Good for him. It's his building. Jones can take those supposed "clients" anywhere and set up another office. Their single complaint should have merely been to get to the client info. Edward Jones has a bad reputation in this business for going after former advisors. But yet, their methodology (albeit) antiquated, doesn't exactly suggest they do much to help garner clients. It takes five minutes to teach someone to knock on a door.
Jun. 8, 2021 at 05:12 PM EDT
What is EJ going to do now? Pandemic crushed their model. No FA, FP, FC, or whatever title you want to give them is going to move their practice to EJ with their platform. It was great when you could hire a college kid or a former engineer and teach them Investing 101. Their model is broken.