JP Morgan settled his lawsuit against Cresset related to the alleged poaching of several advisers.
In 2019, JPMorgan accused Cresset CEO and Co-Chairman Douglas Regan to sue JPMorgan staff for breach of their contractual obligations with the bank, according to an arbitration request filed with the American Arbitration Association through JPMorgan Securities and JPMorgan Chase.
Regan had previously served as head of the Midwest region and managing director of private banking at JPMorgan and therefore had access to confidential information about more than 275 JPMorgan advisers, JPMorgan claimed.
Regan’s solicitation, JPMorgan said, resulted in a “loss of tens of millions of dollars in client assets and substantial revenue well in excess of $75,000,” according to its arbitration request.
In May 2021, JPMorgan filed a lawsuit in the United States District Court, Northern District of Illinois seeking enforcement of a subpoena in arbitration before the AAA, appointing Cresset Asset Managementformerly known as Cresset Wealth Advisors, as a respondent. Chicago-based registered investment advisory firm Cresset Asset Management had about $20 billion in client assets and 255 employees as of October, according to its Form ADV.
By May of last year, according to JPMorgan, Cresset had successfully poached 10 “professionals from JPMorgan”.
Cresset, meanwhile, filed a motion in July to dismiss the lawsuit, saying it was the fourth time in three years that JPMorgan had filed a lawsuit against her, asking that the sequel be “dismissed for lack of jurisdiction in the matter.” “.
Then, in August, JPMorgan accused Cresset of failing to comply with the subpoena related to its case against Regan, as reported.
Last month, however, the two firms reached a stipulated agreement to dismiss the lawsuit, with prejudice, with each bearing their own attorneys’ fees and costs, according to a document filed with the Northeast U.S. District Court. Illinois.
In an unrelated case, a Financial Sector Regulatory Authority the arbitration panel ordered Benjamin F. Edwards & Co. pay more than $18 million to Stephens following allegations of poaching, as noted.
Stephens, a registered broker and investment adviser based in Little Rock, Arkansas, filed a claim in September 2017. The company alleged that BFE and Benjamin Edward IV, who founded the company in 2008, raided Stephens and engaged in tortious interference with economic benefit, contractual and business relationships, according to an award document released last week. Stephens also alleged that BFE violated broker recruiting protocol, Finra said.
The respondents denied the allegations, but Finra’s arbitration panel ruled that BFE and Edwards were in fact responsible for raiding Stephens employees, finding there was “serious economic harm” and a ” predatory intent,” according to industry self-regulation.
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