Edward Jones Wins 11% of Damages Sought from Breakaway Broker
An arbitration panel in Cincinnati ordered a former Edward Jones broker and the independent broker-dealer he affiliated with 14 months ago to pay his former firm $24,873, about 11% of the almost $219,000 it had requested.
Jones filed its claim for breach-of-contract and trade secret misappropriation damages against Jay Slouffman and Prospera Financial Services in November 2017, just weeks after the broker left the Mason, Ohio, Jones office he had been running since becoming a registered representative in 2001.
Slouffman was using phone and account numbers of more than 1,600 Jones clients in violation of his employment contracts and other restrictive covenants, Jones alleged. The broker had been producing about $1.1 million in annual revenue and was overseeing about $186 million of customer assets, Prospera said when he made the move.
Slouffman, his lawyer and a Prospera spokeswoman did not return calls for comment on the award or how the Jones litigation has affected the broker’s new practice. A Jones spokesman confirmed the award but said he could not immediately provide further comment on the decision.
The three-person arbitration panel denied Jones’s claim for attorneys’ fees and costs, according to the award document that Finra posted on its arbitration website on Thursday. The document did not address whether Jones had succeeded in its initial request for an immediate permanent restraining order to prevent Slouffman from soliciting his former clients.
The St. Louis-based broker-dealer has been aggressive in recent years about pursuing brokers who may have breached their contracts by prematurely telling customers of transition plans. It asked a court in November for a temporary restraining order in November against an Ohio broker who jumped to independence, and won a similar TRO request against a Texas broker in March 2017.
Stephen Wray, who left his Jones office near Dayton, Ohio, to go independent through Raymond James Financial a few months before Slouffman’s departure, said on Thursday that he did not attract litigation from the firm.“I paid an attorney thousands of dollars to tell me to be sure not to say anything about my plans,” said Wray, noting that he nevertheless quickly managed to attract some 90% of the clients he wanted to keep to his new practice. “I still haven’t actively reached out even though my one-year limit is up. If they haven’t called by now, I’m guessing the relationship I had with them just wasn’t strong enough.”