If you’re a California financial advisor who left Ameriprise Financial to join LPL Financial and now find yourself facing a lawsuit for allegedly taking client information, you’re not alone. In recent months, many brokers – especially in California – have been sued by Ameriprise in FINRA arbitration after making the switch to LPL. These lawsuits claim that departing advisors misappropriated confidential client data or trade secrets when they moved. Facing a legal battle against a large firm like Ameriprise can feel overwhelming, but this comprehensive guide will explain why these disputes occur, how FINRA arbitration works, and why hiring an experienced FINRA arbitration defense attorney in California is crucial.

Below, we’ll cover:

• Background: Why Ameriprise is suing brokers who join LPL, and the nature of these cases (client data, trade secret, protocol issues, etc.)

• FINRA Arbitration Basics: The difference from court litigation, and what to expect

• Legal Risks for Advisors: TROs (temporary restraining orders), injunctions, damages, regulatory concerns

• What to Do If You’re Being Sued: Practical steps to protect your career

• Our Defense Approach: How Bakhtiari & Harrison represents brokers, and what sets us apart

• FAQs: Quick answers to common questions about Ameriprise-LPL lawsuits and FINRA arbitration

By the end, you’ll have a clear plan for responding if you’ve been sued (or threatened with a lawsuit) and why skilled legal counsel can make the difference between a career setback and a successful defense.

Background: Why Ameriprise Is Suing Brokers Who Join LPL

Over the last year, Ameriprise Financial has filed multiple legal actions against ex-Ameriprise advisors who transitioned to LPL Financial. The disputes often revolve around claims that departing advisors took more than just their client relationships when leaving – specifically, private or “trade secret” client data.

Ameriprise alleges that these advisors:

• Downloaded or copied extensive client lists

• Took personal financial information about clients beyond just names and contact details

• Engaged in pre-resignation solicitation or used Ameriprise’s data to move clients to LPL

LPL, for its part, typically denies these allegations and asserts that it instructs incoming advisors to follow the Broker Protocol, which permits advisors to take limited client contact information when moving between signatory firms. Ameriprise’s position is that these advisors (and LPL) went beyond protocol limits, effectively misappropriating trade secrets. Advisors, meanwhile, often argue they only took what was permissible and that Ameriprise is using litigation to deter further attrition.

Because California is a key market where many advisors have switched firms, these disputes play out frequently here. It’s vital to understand the interplay of California’s pro-competition laws, the Broker Protocol, and Ameriprise’s attempts to enforce confidentiality and non-solicitation agreements.

Broker Protocol: Where Does It Fit In?

Both Ameriprise and LPL are signatories to the Broker Protocol, an industry agreement that allows departing advisors to take a limited list of client names, phone numbers, addresses, and account titles – no more. The goal of the Protocol is to reduce litigation when advisors change firms, ensuring a fair transition and client choice.

However, Ameriprise often claims that the ex-advisors:

• Took more than the Protocol allows

• Downloaded entire files with sensitive data such as account balances and social security numbers

• Solicited clients before resigning, violating the fiduciary duty of loyalty

If these allegations are upheld, advisors could face serious legal consequences. That’s why it’s essential to be proactive and strategic if you receive legal documents from Ameriprise.

FINRA Arbitration 101: Understanding the Process

Nearly all industry disputes involving broker-dealers, registered reps, and allegations of trade secret theft end up in FINRA arbitration, not public court. This is because:

• Your Form U4 likely has a mandatory arbitration clause

• FINRA requires disputes between registered individuals and firms to be arbitrated

• It’s often faster and more private than litigation in court

Nevertheless, Ameriprise (or any former employer) might first go to court to seek a temporary restraining order (TRO) or preliminary injunction to stop further solicitation or use of client data while the dispute is pending arbitration. Once that immediate relief is addressed, the core claims will proceed in FINRA arbitration.

Key Points About FINRA Arbitration

• Private forum: Unlike a court case, FINRA arbitrations are not generally open to the public, and there is no jury.

• Arbitrators have broad discretion: One to three arbitrators will hear evidence, ask questions, and ultimately render a binding award.

• Expedited timeline: Cases typically resolve faster than in civil court, sometimes within a year.

• Limited appeals: Arbitration awards can’t be easily overturned in court.

For an advisor who has never been sued, arbitration can feel daunting. The process and rules differ from typical civil litigation, making it crucial to have an attorney who understands the nuances of FINRA arbitration and securities law.

The Legal Risks: TROs, Injunctions, and More

When Ameriprise believes a former broker is unfairly soliciting clients or using confidential data, they may immediately seek a court order:

• Temporary Restraining Order (TRO): A short-term order issued on an emergency basis to stop alleged wrongdoing, often within days of filing.

• Preliminary Injunction: If the court is persuaded there’s likely a violation, it can extend restrictions until the underlying dispute is resolved in arbitration.

Such orders can prevent you from contacting certain clients, destroy or return data, and potentially freeze your ability to conduct business with former Ameriprise clients. While not always granted, TROs and preliminary injunctions pose a major threat to your livelihood, so they must be handled immediately and aggressively.

In the FINRA arbitration itself, Ameriprise may allege:

• Misappropriation of trade secrets under state or federal law

• Breach of contract if your employment or rep agreement included confidentiality or non-solicitation clauses

• Breach of fiduciary duty/duty of loyalty for soliciting clients before leaving

• Unfair competition and other business torts

If the arbitration panel finds you liable, potential outcomes include:

• Damages for lost revenue or unjust enrichment

• Attorneys’ fees if the contract or statute permits fee-shifting

• Permanent injunction preventing solicitation of specific clients

• Negative marks on your record or disclosures on your Form U4/U5

Given the potential severity, seeking competent legal representation is critical. These cases move quickly, and the consequences of an adverse ruling can be long-lasting.

What To Do If You’re Being Sued By Ameriprise After Joining LPL

1. Stay Calm But Act Quickly

Receiving a lawsuit or arbitration claim from your former firm is stressful, but you’re not the first to go through it. Many advisors have successfully defended themselves. That said, speed is essential – TROs can be decided in days, and missing deadlines can devastate your case.

2. Read All Documents Thoroughly

Review the complaint or arbitration claim to see exactly what Ameriprise accuses you of. Check if there’s a court date set for a TRO hearing. Note the deadlines for filing an Answer in FINRA arbitration (usually 45 days) or opposing a TRO.

3. Retain a Securities Litigation Attorney

Hire a lawyer who understands FINRA arbitration and broker transition disputes. This is a niche area requiring knowledge of:

• Broker Protocol and industry norms

• Trade secret and confidentiality laws

• California’s unique legal stance on non-competes

• Court procedures for TROs and injunctions

Don’t rely solely on LPL’s in-house counsel, as their main priority is the firm’s interests. A personal attorney ensures your defense and career remain front and center.

4. Preserve Evidence

Gather any documents or communications relevant to your move:

• Emails or texts with LPL about what you can/can’t take

• Resignation letters and any Broker Protocol checklists

• Your agreements with Ameriprise, including confidentiality or non-solicitation clauses

• Client files (if any) you downloaded or took

Never delete or destroy anything; spoliation can ruin your credibility. Instead, share everything with your attorney, who will craft the best defense narrative.

5. Comply With Court Orders

If a TRO or preliminary injunction is already in place, follow it strictly. Violating a court order can lead to contempt charges. If no order exists yet, consult your attorney about how best to communicate with former clients to avoid allegations of improper solicitation.

6. Explore Settlement, But Don’t Panic

Negotiated settlements are common, but initial offers from Ameriprise can be harsh. A skilled attorney can often get better terms, such as allowing you to keep certain high-value clients or removing damaging U5 remarks. Being prepared to fight is the best leverage for a fair deal.

7. Keep Professional and Personal Support

Litigation is emotionally draining. Lean on your family, friends, and mentors. Clients loyal to you might be willing to provide statements. Avoid publicly discussing case details, though. Work closely with your attorney to ensure all communication aligns with your defense strategy.

How Bakhtiari & Harrison Represents Brokers in FINRA Arbitration

At Bakhtiari & Harrison, we have deep experience representing financial professionals in high-stakes litigation and FINRA arbitrations. Our defense strategy for Ameriprise vs. LPL disputes focuses on:

1. Rapid Response to TROs and Injunctions

We immediately engage in any court action seeking emergency relief. Our aim is to either defeat the TRO or narrowly tailor it so you can keep conducting business with minimal disruption.

2. Challenging Ameriprise’s Claims

We systematically attack the elements of alleged misappropriation or contract breaches, highlighting:

• Broker Protocol compliance

• Public or previously known client info (not a trade secret)

• The fact that clients voluntarily followed you or initiated contact

We also show that Ameriprise cannot prove irreparable harm if the purported “trade secret” data is already widely accessible or known.

3. Asserting Affirmative Defenses

Possible defenses include:

• Protocol adherence

• No trade secret (publicly available or personal knowledge)

• California’s strong public policy favoring competition

• Lack of damages or failure by Ameriprise to protect the info as secret

Each case is fact-specific, and we tailor our approach accordingly.

4. Targeted Discovery and Forensic Analysis

We know how to leverage FINRA’s discovery rules and request evidence to support your position. We’ll bring in forensic experts if needed to counter Ameriprise’s technical claims. Our team can also uncover internal communications at Ameriprise that may weaken their case.

5. Skilled Arbitration Advocacy

Having handled numerous FINRA arbitrations, we understand how to select the right panel, present complex financial data persuasively, and challenge adverse witnesses. We aim for a dismissal of Ameriprise’s claims or, if liability is found, to minimize damages and injunctive relief.

6. Strategic Settlement Negotiations

While we prepare every case as if it will go to hearing, we also explore settlement if it can achieve your objectives. That may include dropping the case entirely or allowing you to retain key client relationships without paying large sums. Our reputation as formidable litigators can lead to better settlement terms.

7. Protecting Your Record

We fight to keep your Form U4/U5 clear of negative language so your transition to LPL (or any future move) doesn’t impair your career. If Ameriprise made potentially defamatory statements in your U5, we can pursue expungement or amendments.

Why Choose Bakhtiari & Harrison

Deep Securities Law Knowledge

Our firm concentrates on securities litigation and FINRA arbitration, giving us the industry knowledge needed to mount effective defenses for advisors. We’re familiar with Broker Protocol litigation, trade secret rules, and how to push back against overbroad claims.

Proven FINRA Arbitration Experience

Our attorneys have successfully defended brokers nationwide in FINRA cases, from initial pleadings through final hearings and awards. We know the arbitrator selection process and the best practices for presenting evidence effectively.

Litigation Savvy

If Ameriprise seeks a TRO in state or federal court, we’re fully prepared to challenge it. Our lawyers are seasoned litigators and will stand up to big-firm opposing counsel to protect your rights.

California Broker Transition Proficiency

We have a deep understanding of how California law affects non-solicitation and confidentiality clauses. We’ll leverage California’s strong anti-noncompete stance and trade secret precedents to your advantage.

Client-Focused Service

We work directly with you, maintain open communication, and align our strategies with your professional goals. We recognize that you’ve built client relationships over many years – we fight to help you keep them.

Reputation for Results

Our track record in representing brokers in similar disputes has earned us the respect of peers, arbitrators, and opposing counsel. We use that standing to your benefit, whether in negotiations or hearings.

FAQs: Ameriprise vs. LPL Lawsuits and FINRA Arbitration

What Is FINRA Arbitration and Why Is My Case There?

FINRA is the self-regulatory organization overseeing the securities industry. Most broker employment agreements require disputes to be arbitrated rather than litigated in court (apart from temporary injunctions). Arbitration is typically faster and handled by securities-savvy arbitrators, but the awards are binding with limited appeal.

Can Ameriprise Prevent Me From Contacting My Clients?

They can seek a court-issued TRO or preliminary injunction barring you from soliciting specific clients. Whether they succeed depends on whether they prove likely trade secret misuse or breach of contract. If a TRO is granted, it’s temporary, and the final merits are decided in arbitration.

Isn’t California a Non-Compete Ban State?

Yes, California generally bans non-competes and overly broad non-solicitation clauses. However, it still protects legitimate trade secrets. Ameriprise may claim your actions go beyond lawful competition because you used confidential or proprietary data. We’ll argue your right to compete freely under state law if you didn’t actually misuse or take secret info.

What Could Happen If Ameriprise Wins?

Possible consequences include damages (Ameriprise’s lost revenue, your unjust enrichment), attorneys’ fees, and an injunction barring further solicitation. An adverse finding might also create a negative disclosure on your regulatory record. Skilled defense can reduce or eliminate these outcomes.

Will LPL Cover My Legal Fees?

LPL often defends itself but doesn’t necessarily cover individual brokers’ attorneys’ fees, especially if there’s a conflict of interest. Check your hiring package for any indemnification clauses, but you should strongly consider personal counsel with your own interests at heart.

How Long Will This Take?

A typical broker transition arbitration might last 6-12 months. If Ameriprise seeks a TRO, the initial court hearing will happen rapidly, but the core claims are resolved by a FINRA panel, which usually schedules a hearing within the year. Settlements can occur at any point.

How Has Bakhtiari & Harrison Helped Other Advisors?

Our firm has successfully defended brokers in a variety of transition-related disputes, defeating TRO requests, obtaining favorable arbitration awards, and securing settlement terms that allow advisors to keep key client relationships. We also help clean up U5 language to protect your regulatory record.

Protect Your Career With Skilled Defense

Ameriprise’s aggressive stance on confidential information and trade secrets can put California advisors who move to LPL in a difficult position. Even if you believe you fully complied with the Broker Protocol, defending against a lawsuit or arbitration claim from a major firm is no small feat. The stakes include lost client relationships, financial penalties, and damage to your professional record.

By understanding the rules of FINRA arbitration, the potential for TROs, and your options for defense, you can take proactive steps to protect your livelihood. At Bakhtiari & Harrison, we’ve guided many brokers through these stormy waters. Our focus on securities litigation and deep knowledge of California law give us the edge in fighting – and winning – high-stakes disputes.

If you are being sued by Ameriprise or fear a lawsuit is imminent, reach out to Bakhtiari & Harrison today. We’ll assess your situation, explain your rights, and develop a strategic defense to help you continue building your career at LPL or any future firm. Don’t let Ameriprise’s legal threats derail your hard-earned success. Contact us now and let us fight for you in FINRA arbitration.