Ameriprise sues LPL Financial over alleged misappropriation of client data

Ameriprise Financial

30/07/2024 18:34

July 30 (Reuters) - Ameriprise Financial  AMP.N  said on
Tuesday it has filed a lawsuit in a U.S. district court against
LPL Financial  LPLA.O , alleging it harvests and misuses
confidential client information in violation of legal,
regulatory and industry obligations.  
    In the lawsuit, Ameriprise alleged "LPL systematically
directs the advisers it recruits from Ameriprise and its
competitors to take confidential information on their way out
the door". 
    Ameriprise added that LPL's alleged conduct is in direct
violation of multiple securities laws.
    LPL, an independent broker dealer and financial services
firm, did not immediately respond to a request for comment. 
    Lawsuits alleging mishandling of trade secrets are common in
the cut-throat financial services industry, especially if
employees leave for competitors. Advisers are often very
protective of data about their clients - such as details about
investment portfolios and risk appetite.
    Earlier this year, Jane Street Group sued its hedge fund
rival Millennium Management, accusing it of stealing a valuable
in-house trading strategy after two traders defected.
    LPL serves 23,000 financial advisers at around 1,000
institutions and roughly 580 registered investment advisers
firms nationwide, its latest earnings release showed. 
    The two firms have a history of hiring advisers from one
another. In July, LPL added a pair of advisers from Ameriprise
who reportedly managed around $475 million of assets. 
    In June, Ameriprise said a team with $105 million in assets
returned to the company after 5 years at LPL.
     

 (Reporting by Manya Saini and Niket Nishant in Bengaluru)
 ((Manya.Saini@thomsonreuters.com; X: manya__saini;))