LPL Financial has withdrawn its request for a temporary restraining order and dropped its defamation lawsuit against rival firm Ameriprise Financial, following an agreement between the two wealth management giants concerning disputed data breach notices sent to clients.
Ameriprise agreed to inform LPL which specific customers received the notices, which LPL had alleged were defamatory, according to the order which was approved by a federal judge. However, the agreement limits LPL’s outreach based on this list. According to third-party reporting, LPL may only contact customers who have already transferred their accounts to LPL, not those who remain with Ameriprise.
Furthermore, both firms agreed to give each other 48 hours’ notice before sending any future communications to LPL clients affected by the alleged data breach.
While this agreement resolves the immediate issue of the restraining order, it does not end the underlying legal battle. The court order explicitly allows LPL to continue pursuing claims for damages related to defamation and other allegations through the arbitration process.
Thus, LPL could bring its allegations before a Financial Industry Regulatory Authority arbitration panel. Likewise, Ameriprise said it could seek compensation for legal expenses in FINRA arbitration.
Nonetheless, the firms offered positive yet contrasting views on the resolution. An Ameriprise spokesperson expressed satisfaction with the dismissal, stating it was “recognition that LPL brought baseless charges” and that its attempts to “shift the narrative away from its misconduct” did not work. “While LPL may not perceive risk with the unauthorized and unsecured transfer of confidential, personal information, we’ll always stand up for clients and protect them,” said the spokesperson.
LPL also stated it was pleased with the outcome. “This agreement helps to safeguard the trust and transparency that are vital to our advisers and their clients,” an LPL spokesperson said. “Ameriprise must provide a list of individuals who received what we see as misleading data breach notices, and protections are now in place to prevent this from happening in the future.”
LPL filed its lawsuit in April, alleging defamation and tortious interference and seeking the temporary restraining order in an attempt to prevent Ameriprise from making further statement that the firm deems defamatory. LPL argued that it needed to identify affected clients to respond appropriately.
In response, Ameriprise filed a motion of opposition, seeking to deny LPL’s TRO request. Ameriprise claimed that it was obligated to send a letter regarding the potential data breach and furthermore, the data breach notice is not defamatory because the information contained in the notice is substantially true.
The dispute stems from recruiting tactics and the use of client data. LPL had stated that 30 financial advisers joined the firm from Ameriprise between 2018 and 2021, with Ameriprise reportedly taking the position that advisers could not retain client information when transitioning to a new firm. LPL disagreed, and Ameriprise filed a court complaint in July 2024.
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