A former JPMorgan advisor has agreed to a temporary restraining order setting the stage for a lawsuit concerning his recent departure to Morgan Stanley to be settled by FINRA arbitration.
JP Morgan sued Henry Robert Gleckler IV in New York’s Supreme Court on Nov. 26 over allegations that he had violated various nonsolicitation and data privacy provisions he had agreed to while working as a private client advisor at the firm. He was specifically accused of using JPMorgan’s proprietary account information to try to bring his former clients over to Morgan Stanley, which he had joined roughly a week and a half before.
JPMorgan’s suit sought a temporary restraining order requiring Gleckler to abide by the terms of his nonsolicitation agreement, which bars him from seeking the business of his old clients for a year after departing. Gleckler agreed to accept the terms of the restraining order in a stipulated injunction approved Wednesday by Justice Jeffrey Pearlman.
A JPMorgan spokesperson declined to comment for this article. Glecker’s lawyer, Jonathan Thau, said Gleckler admitted to no liability or wrongdoing and that Gleckler’s former clients remain free to move their money over to him at Morgan Stanley.
“He just agreed with the stipulated injunction to continue to honor the terms of his nonsolicitation, which we maintain he has been honoring the entire time,” Thau said.
Not soliciting JPMorgan’s clients, not using its proprietary data
Gleckler’s acceptance of the restraining order now sends his dispute for resolution before an arbitration panel administered by the Financial Industry Regulatory Association, the broker-dealer industry’s self-regulator. Under the restraining order, Gleckler has agreed to:
Not solicit any JPMorgan client whose name he came to know through his employment at JPMorgan;Not use or disclose any JPMorgan or confidential information pertaining to the firm, its employees or clients. Gleckler was given five days to return any proprietary data he may have in his possession.
Gleckler is among several private client advisors JPMorgan has taken to court in recent months over allegations that they had violated their nonsolicitation obligations after leaving the firm. The firm’s others include:
Matthew Madera, a private client advisor who left JPMorgan in October to join Genesis Wealth in the Chicago suburb of Bolingbrook, IllinoisBrandon M. Love, who left in August to join UBS in the Detroit suburb of West Bloomfield, MichiganLaura Sullivan, who left in May to join Morgan Stanley in Farmington Hills, MichiganMatthew McCrea, who left in April to join Wells Fargo in Las Vegas
Private client advisors versus other financial advisors
All the cases are grounded in the argument that private client advisors don’t develop client relationships the way most advisors do. Rather than securing those relationships on their own, JPMorgan argues, private client advisors receive the majority of their client referrals through JPMorgan’s bank, meaning they have far less claim to owning their books of business than do other advisors.
In its lawsuit against Geckler, JPMorgan sums up its position in a paragraph almost identical to similar passages in other suits against private client advisors.
“Gleckler sat at his desk and was introduced to hundreds of existing bank clients (with or without investment accounts) to offer and provide access to investment opportunities through Chase Wealth Management,” according to the suit. “As a Private Client Advisor (or a Financial Advisor), Gleckler was not expected to engage in cold calling or attempt to build a client base independent of referrals from JPMorgan.”
JPMorgan’s suit says Glecker had been working with 383 client households with $474 million in assets under management when he left and has managed to move roughly 25 households or clients, with $56 million in assets, to Morgan Stanley. The suit accuses him of breach of contract, misappropriation of trade secrets and confidential information, breach of fiduciary duty, breach of the duty of loyalty and other violations.
