JPMorgan Chase is bringing one other former advisor to court docket, claiming he broke non-solicitation vows in his employment agreements with the agency when he left to affix Morgan Stanley.
In response to the go well with filed in federal court docket in Florida this week, Brian Krauthamer was a personal consumer advisor working out of a JPMorgan financial institution department workplace in Boca Raton, Fla. Nevertheless, on Could 1, he resigned and shortly afterward joined Morgan Stanley.
JPMorgan is asking for a brief restraining order to cease Krauthamer’s alleged makes an attempt to entice his former purchasers to affix him at his new agency.
In response to FINRA, Krauthamer first entered the trade in 2006 at Ameriprise, then joined Chase Funding Companies in 2010 and formally registered with JPMorgan Chase two years later.
JPMorgan claimed that Krauthamer had signed restrictive covenants prohibiting him from soliciting the agency’s purchasers for one 12 months after his employment ended and requiring him to take care of the confidentiality of consumer info.
After turning into a Choose Non-public Consumer Advisor in 2024, Krauthamer moved from Southampton, N.Y., to Florida, in keeping with stories. The financial institution claimed that, in his position as an advisor, he was launched to present financial institution purchasers and subsequently had constructed a e book of enterprise with JPMorgan’s help.
The financial institution claims that since becoming a member of Morgan Stanley, Krauthamer was soliciting former purchasers to maneuver their enterprise to the wirehouse, in some cases calling them on their private cell telephones. The financial institution claims these cellphone numbers have been simply a part of the confidential info the advisor took with him.
In a single case, Krauthamer advised purchasers that Morgan Stanley provided “a sturdy alternative” with extra choices than JPMorgan, whereas one other consumer felt he was “pushy” about requesting an appointment. Not less than 4 different purchasers advised JPMorgan about Krauthamer’s solicitation makes an attempt, the financial institution claims.
JPMorgan says that about 90 households with belongings totaling about $161 million had opted to maneuver their enterprise with Krauthamer to Morgan Stanley (the agency believed that on the time he resigned, Krauthamer labored with about 244 households with about $229 million in belongings underneath supervision).
Morgan Stanley declined to remark for this story. An lawyer for Krauthamer didn’t return a request for remark previous to publication.
JPMorgan has incessantly introduced former advisors to court docket, accusing them of comparable violations of their employment contracts with the agency. Financial institution department advisors usually have extra stringent phrases of their employment contracts than others, since they don’t seem to be usually liable for constructing their very own books of enterprise.
In January, JPMorgan filed a go well with towards one other advisor, alleging that Kevin Sercia solicited purchasers after becoming a member of LPL Monetary and organising a brand new workplace in a constructing “actually throughout the parking zone” from his former JPMorgan financial institution department in Stuart, Fla.
Earlier this week, JPMorgan Chase’s Head of Client Banking, Marianne Lake, introduced her retirement. The transfer reshuffled the potential successors to Chief Govt Officer Jamie Dimon.
In response, the agency named Troy Rohrbaugh and Doug Petno as co-presidents, placing them within the operating to probably succeed Dimon if and when he steps down. Rohrbaugh is changing Lake, whereas Petno will oversee the agency’s business and funding financial institution.
The duo acquired $30 million one-time retention awards, whereas Chief Working Officer Jenn Piepszak and Mary Erdoes, who runs the agency’s asset and wealth administration division, every acquired $20 million. The titles of the latter two executives have been unchanged on this week’s reshuffling.
