Smith Barney has hit a former adviser with a lawsuit, an arbitration claim and a restraining order, claiming that the rep improperly pursued clients and used confidential information after he resigned from the brokerage arm of New York-based Citigroup Inc. at midmonth.
Smith Barney has hit a former adviser with a lawsuit, an arbitration claim and a restraining order, claiming that the rep improperly pursued clients and used confidential information after he resigned from the brokerage arm of New York-based Citigroup Inc. at midmonth.
Brian Dillon, an adviser who left Smith Barney on May 15 to join Minneapolis-based Ameriprise Financial Services Inc., allegedly breached a contract he signed with Smith Barney in 2007 when the firm assigned him a number of clients from another adviser who was retiring at the time.
Smith Barney, according to court documents, claims that Mr. Dillon recently attempted to convince many of these clients to transfer their accounts to Ameriprise, even though he agreed not to do so when he originally inherited these accounts.
"Dillon did not have any relationship with these customers prior to servicing them and could not have solicited them immediately after resigning from Smith Barney unless he had taken these customers' information with him to Ameriprise," Smith Barney claimed in a lawsuit that was filed in U.S. District Court in New Jersey on May 19.
The suit also requested that a temporary restraining order be placed on Mr. Dillon directing him, as well as Ameriprise, to return any confidential information to Smith Barney.
Smith Barney also filed a simultaneous arbitration claim with the Financial Industry Regulatory Authority Inc. of New York and Washington to resolve the issue.
Smith Barney claims it will be "irreparably harmed by the disclosure of its trade secrets, customer lists and other Smith Barney confidential information," it noted in the suit, which named Ameriprise as a defendant as well.
"No price tag can be placed on the destruction of the benefits Smith Barney has accrued from such efforts and it is impossible to determine how much Smith Barney stands to lose as a result of [Mr. Dillon's] misconduct," Smith Barney claims in the complaint.
Mr. Dillon's attorneys at Fisher & Phillips LLP in Murray Hill, N.J., did not return calls for comment.
Ameriprise spokesman Benjamin Pratt was also unavailable.
Attorneys representing Smith Barney directed calls to spokesman Alex Samuelson, who declined to comment on the suit.
