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

 


It was really fun seeing you fight for us. You have an amazing way of thinking out of the box.


 

Beth M.

LATEST NEWS AND ARTICLES

September 26, 2025
SEC and DOJ Target $770 Million Prestige Funds Ponzi Scheme

Federal regulators say thousands of investors may have lost money in what they allege was a massive Ponzi scheme tied to the Prestige Funds and WF Velocity Funds.

September 25, 2025
FINRA Suspends Spartan Capital Broker for Excessive Trading Violations

The Financial Industry Regulatory Authority (FINRA) has suspended Joseph Kelly, a broker at Spartan Capital Securities, for nine months and ordered him to pay a $10,000 fine and $69,830 in restitution.

September 24, 2025
How New CCOs Can Navigate Today's Compliance Challenges

The role of the chief compliance officer (CCO) has never carried more weight or more complexity, according to Wealth Management.