Edward Jones Seeks TRO, Damages Against Fired Nebraska Broker
Edward D. Jones & Co. has asked a federal court to enjoin a Nebraska broker from calling clients whose account and contact information he allegedly printed out a day before he was terminated from his $146.7 million-asset branch.
In a lawsuit filed Thursday in U.S. District Court in Omaha, the firm said that James Loyet intended to solicit Jones’ customers and “induce” them to terminate their relationship with the firm by using the purloined lists in violation of his employment contracts.
Loyet, whose 16-year brokerage career has been spent solely with Jones in Omaha, according to his BrokerCheck record, could not be reached for comment.
He is not currently registered with another firm. A Jones spokesman declined to comment on why Loyet was terminated or whether it was aware of another firm where he is working or plans to work.
The court filing, which asks for unspecified compensatory and exemplary (punitive) damages and attorneys’ fees, seeks to temporarily enjoin him from using its “trade secrets” data pending resolution of a Finra arbitration complaint that Jones said it filed contemporaneously.
Jones, which with over 16,000 brokers in mostly two-person offices is the largest U.S. broker-dealer, has for several years been pursuing brokers who allegedly breached their contracts and stole confidential client information in advance of voluntary moves to other firms.
In January, it prevailed in winning a small percentage of damages sought in a Finra arbitration from an Ohio broker who independent broker-dealer joined Prospera Financial, and in November initiated a court complaint against another Ohio broker who affiliated with independent firm Cambridge Investment Research. It succeeded in clamping solicitations from a former broker in Texas
The St. Louis-based firm is not a member of the Protocol for Broker Recruiting, which allows brokers to take limited client contact information when moving among signatories to the pact.
Morgan Stanley and UBS sent fault lines through the Protocol in late 2017 when they withdrew the agreement, but it is firms with national franchises of small offices such as Jones and Edelman Financial Engines, along with discount brokers such as Charles Schwab and Fidelity Investments that have recently wielded their legal swords against departing advisors.
“Improper dissemination of Edward Jones’ trade secrets and client information to third parties will result in monetary damages as well as harm to its business reputation and loss of goodwill,” Jones’ court filing said.