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FINRA Panel Upends TRO Against Former Broker

By Kara Siegel of Shustak Reynolds & Partners, P.C. posted on Friday, December 13, 2019.

Kara Siegel

Kara Siegel

Senior Attorney

Last week, a FINRA arbitration panel took the extraordinary step of ordering the parties to an arbitration to request dissolution of a temporary restraining order (TRO) imposed by a district judge in Nevada.

On November 12, 2019, Edward Jones had secured a TRO and injunction preventing former broker Mike Peterson from contacting his former clients. Edward Jones argued that after running the company’s Henderson, Nevada office for 13 years, Peterson had decamped for rival Ameriprise, contacted at least 11 former customers using Edward Jones’s confidential client data, and sent transfer paperwork to at least 15 former customers. Indeed, Edward Jones alleged that shortly after joining Ameriprise, Peterson had moved as much as $15 million dollars from 11 former Edward Jones clients. Peterson denies the allegations.

The district court’s granting of the TRO permitted an expedited hearing schedule from FINRA. And last week, the FINRA arbitration panel ordered the parties to request that the district court dismiss the TRO.

The drastic move may indicate that the panel was unimpressed with the evidence Edward Jones had presented to the district court. Peterson’s lawyers argue that he merely informed some clients of his move, consistent with industry practice.

The panel’s order may also signal the panel’s displeasure with Edward Jones’s many recent actions against former brokers. The firm is not a member of the Protocol for Broker Recruiting, and in the past year, it has aggressively pursued several brokers who left the firm for rivals–and even one who left to start her own practice. The federal judge in that case found that Edward Jones encourages recruits to send former clients affiliation announcements akin to those it challenged in the lawsuit.

Shustak Reynolds & Partners, P.C. has extensive experience representing brokers and financial advisors in recruitment, employment, and wrongful-termination disputes, promissory-note claims, and FINRA arbitrations and regulatory proceedings. Contact us today for a complimentary consultation.

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. 
Attorney Kara Siegel can be reached in the firm’s San Diego office at (619) 696-9500.

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