JPMorgan, LPL Broker Reach Truce on TRO

JPMorgan Chase & Co. and a bank-based advisor who joined LPL have reached a truce in the first stage of a battle over client solicitation. Alan C. Feutz, who is based in Deerfield, Illinois, and moved in June, agreed to abide by the terms of his non-solicitation agreements barring him from encouraging customers to move assets to LPL, according to a stipulated agreement reached on Thursday. In return, JPMorgan clarified that nothing blocks Feutz, who LPL said managed $725 million, from processing in-bound accou nt transfer requests or doing business with those who have already moved their accounts. The bank agreed that the court “need take no action” on its request for a temporary restraining order, and both sides waived their right to a preliminary injunction hearing. The agreement is a common first step that brokers take in seeking to resolve TRO disputes. By agreeing to an early stipulation, the case can proceed on an expedited basis in arbitration where JPMorgan will argue for damages and a permanent injunction. Feutz did not admit or deny wrongdoing as part of the stipulation. “The Stipulated Order merely confirms that Mr. Feutz will continue to abide by his lawful continuing obligations to JPMS,” Feutz’ lawyer James V. Garvey, who chairs the restrictive covenants group at Vedder, said in an email. “It is not an admission or concession that he has not met those obligations to date. He has,” he added. “The merits of JPMS’ claims will now be adjudicated in the FINRA arbitration forum, Garvey also said, stressing that he and his client are confident of prevailing based on merits “once there has been a fulsome vetting of the evidence.” Garvey previously had said the bank’s “allegations against Mr. Feutz are unfounded,” and that he will defend against them “vigorously.” JPMorgan filed its lawsuit in federal court in the Northern District of Illinois on July 15. As in dozens of other cases that the bank has filed in recent years, it alleged that Feutz retained confidential client contact information and used it to encourage clients to move assets to LPL in violation of non-solicitation agreements. The bank alleged that he called former clients on their personal cell phones and told at least one customer that LPL has “a lot more investment choices” than JPMorgan, according to the complaint, which was filed by JPMorgan’s broker-dealer, J.P. Morgan Securities. Another client allegedly said Feutz told her that her fees would stay the same if she moved her accounts to him, according to JPMorgan, which also claimed that clients with at least $146 million had transferred their accounts to him at LPL. Feutz started his career with Dean Witter Reynolds in 1999 and worked at three other firms before moving to JPMorgan’s Chase Investment Services Corp. in 2005, according to BrokerCheck.