J.P. Morgan Files Suit Against Two Advisors Who Departed For Merrill Lynch

Posted on February 15th, 2023 at 4:21 PM
J.P. Morgan Files Suit Against Two Advisors Who Departed For Merrill Lynch

J.P. Morgan has asked a New York state court to issue a temporary restraining order (TRO) barring two of its former advisors from soliciting their former clients. 

The two New York City-based advisors, Stephen DePalma and Kenneth Clough, allegedly misappropriated proprietary client information and violated one-year non-solicitation provisions included in their employment agreements, according to J.P. Morgan’s complaint. J.P. Morgan alleges that the two advisors, who managed nearly $407 million in assets for at least 500 clients, already had transferred three clients with $2.5 million – less than 1% – to Merrill Lynch. J.P. Morgan further alleges that it maintains a right to the advisors’ former clients because the “vast majority” either were pre-existing clients at J.P. Morgan or referred from one of its branches. 

Merrill Lynch offered the two advisors more than $1 million in “financial inducements” to join the firm, according to J.P. Morgan’s complaint. The complaint discusses reports from unidentified clients who informed J.P. Morgan that the advisors called them on their personal cell phones to convince the clients to transfer their business to Merrill Lynch. According to the complaint, the advisors’ communications with former clients went further than “simply announcing” their job change.  

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory and disciplinary matters.

Tags: Eccleston, Eccleston Law

Return to Archive

TESTIMONIALS

Previous
Next

You were most helpful with my FINRA deposition. You are a good lawyer and a good person.

Dan B.

LATEST NEWS AND ARTICLES

December 22, 2025
FINRA Overhauls Arbitration Rules to Rebalance Arbitrator Selection and Codify Forum Practices

The Financial Industry Regulatory Authority (FINRA) has approved significant amendments to its Codes of Arbitration Procedure designed to rebalance public arbitrator selection, increase transparency, and formalize several long-standing practices in the arbitration forum.

December 19, 2025
Industry Groups Press Senate at Advance Financial Exploitation Prevention Act

Several industry associations are urging the U.S. Senate to pass the Financial Exploitation Prevention Act, legislation that would allow mutual fund companies and their transfer agents to delay redemptions when they reasonably suspect elder financial abuse.

December 18, 2025
UBS Warns of Rising Default Risk in Private Credit

A UBS report signals that credit stress likely will intensify next year as borrowers confront inflation, elevated interest costs, and softening consumer conditions.