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Edward Jones Awarded Damages in Claim Against Former Broker

By Matias Montillano of Shustak Reynolds & Partners, P.C. posted on Tuesday, January 15, 2019.

On January 9, 2019, a Financial Industry Regulatory Authority (FINRA) panel found a former Edward Jones broker liable for $24,873 in compensatory damages due to the broker’s breach of contract and restrictive covenant with the firm.  See Edward Jones v. Prospera Financial Services, Inc. and Jay Ralph Slouffman, FINRA Office of Dispute Resolution, No. 17-03220 (Jan. 9, 2019).   The former broker oversaw roughly $186 million of customer assets at Edward Jones before he moved to Prospera Financial Services, an independent broker-dealer firm. 

In its FINRA complaint, Edward Jones alleged that the former broker and the independent broker-dealer he affiliated with are using a list containing confidential and proprietary information, including the identity, primary phone number, call preference, account number, and address of over a thousand Edward Jones clients, in order to solicit those clients and induce them to terminate their relationship with Edward Jones.  Edward Jones also sought a permanent injunction preventing the broker from soliciting his former clients.  It requested nearly $219,000 in compensatory damages plus attorneys’ fees and costs.  The three-person FINRA panel awarded the firm approximately 11% of its requested damages and denied all other claims for relief, including attorneys’ fees. 

This award highlights the extreme importance of following protocol when leaving a member firm. Brokers and financial advisors that leave member firms and remain in the industry must be diligent and remember to read their contracts.

Shustak Reynolds & Partners, P.C. focuses its practice on securities and financial services law and complex business disputes. We routinely represent broker-dealers and financial advisors in arbitrations, financial advisor transitions, broker protocol disputes and related matters. Please contact us today for a confidential, complimentary consultation.

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