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FINRA Panel Denies J.P. Morgan Request for Injunction

By George C. Miller of Shustak Reynolds & Partners, P.C. posted on Friday, January 3, 2020.

A FINRA arbitration panel has denied J.P. Morgan Securities’ request for a permanent injunction preventing its former broker, Eric Weiss, from contacting clients with whom he worked at the firm.  

Weiss left J.P. Morgan for Raymond James earlier in 2019.  Soon after he resigned, J.P. Morgan sued in Indiana federal court seeking an emergency temporary restraining order (TRO) barring Weiss from contacting clients until FINRA’s arbitration division conducted a full hearing on the dispute.  The Court granted the firm’s request, as J.P. Morgan claimed Weiss used “trade secret” customer contact information to illegally solicit clients to join Raymond James and disparaged J.P. Morgan’s name in the process.  While Weiss allegedly transitioned to Raymond James approximately 40 clients representing $27 million in assets under management, he likely could have transitioned significantly more clients and assets had J.P. Morgan not prevailed on its application for a TRO.  Weiss previously managed in excess of $190 million in client assets at J.P. Morgan. 

As is standard protocol in the securities industry, the court only rules on the initial application for emergency relief.  Requests for preliminary or permanent injunctions or monetary damages are addressed in a companion FINRA arbitration proceeding, which generally takes place several weeks after the court proceeding.  Following an arbitration hearing in December 2019, a panel of FINRA arbitrators denied J.P. Morgan’s request for a permanent injunction, suggesting the Panel did not agree with the Court’s rationale in granting the initial TRO. 

Partner George Miller, who routinely counsels financial advisors in transitions and trade secret litigation, was recently quoted in an AdvisorHub article discussing the ruling. 

The J.P. Morgan v. Weiss matter represents just the latest example of the risks associated with a financial advisor’s transition and further highlights the importance of working with experienced counsel through the process. 

Shustak Reynolds & Partners, P.C. focuses its practice on securities and financial services law and complex business disputes. 
We represent many broker-dealers, registered representatives, investment advisors, investors and businesses. 
Partner George C. Miller can be reached in the firm’s San Diego office at (619) 696-9500.

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