A former JPMorgan Chase private client advisor who moved to Wells Fargo agreed to temporarily stop soliciting clients from his former book worth more than $250 million while arbitration is underway.
Gary Carruthers, who resigned in September, was sued by JPMorgan last week after he had allegedly persuaded more than two dozen former clients with $24.3 million in assets under management to transfer their business to Wells Fargo. JPMorgan alleges he violated contracts barring him from soliciting clients for a year after leaving.
The consent agreement, which does not include an admission of liability, was approved on Monday by New York state court Judge Arthur Engoron in Manhattan. The accord will remain in place until a Financial Industry Regulatory Authority arbitration panel issues a dispute-resolution decision.
Under the consent agreement, Carruthers must return all documents regarding JPMorgan’s clients, employees or businesses, including electronic records and hand-written notes. JPMorgan argues Carruthers engaged in “highly suspicious” computer activity during the month before he resigned, rapidly accessing “an unusually high number of client profiles.”
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JPMorgan and Wells Fargo declined to comment. Michael C. Bond, a lawyer for Carruthers, didn’t return messages seeking comment.
Wells Fargo isn’t named as a defendant in the suit, but JPMorgan claims the San Francisco-based bank “incentivized” Carruthers to breach the contract with financial inducements totaling more than $1 million to switch jobs.
The bank says Carruthers had about 369 clients with about $250 million under management when he resigned, and that the “vast majority” of them were either existing clients or were assigned to him by others at the bank. JPMorgan says several of its clients informed the bank that Carruthers had reached out to them to discuss his move to Wells Fargo.
According to the complaint, Carruthers was falsely telling his former clients that he was obliged by federal securities regulations to reach out to them about his move to Wells Fargo.
JPMorgan said multiple clients advised the bank that Carruthers was doing “more than simply announcing his change of employment; he is actively requesting meetings with clients, sending clients Wells Fargo documents and materials that the clients did not request, or otherwise directly asking clients to move their relationships to him at Wells Fargo.”
