JPMorgan Chase sued to have one of its former financial advisers found in contempt after he allegedly suggested the bank overcharged clients as he tried to lure them to join him at Morgan Stanley.
Salvatore Alesia violated a previous court order prohibiting such conduct, JPMorgan Chase said in papers filed Monday in state court in Manhattan.
Alesia worked for JPMorgan Chase at its Melville office until his “abrupt resignation” on March 27, the bank said in its petition. The former investment employee then immediately joined a Melville office of Morgan Stanley, JPMorgan said.
Morgan Stanley spokeswoman Christy Jockle declined to comment. Lauren Ryan, a spokeswoman for JPMorgan Chase, said she didn’t have an immediate comment. Alesia couldn’t be immediately reached for comment.
Alesia said in an earlier legal dispute over his departure that he quit after JPMorgan Chase warned him he was at risk of being fired, citing concerns about his productivity.
“If JPMorgan believes that my performance was so unsatisfactory that I should have faced termination, JPMorgan should not be able to prevent me from continuing to work at my new employer,” Alesia said in March.
JPMorgan Securities is a signatory to a decade-old financial industry accord called The Protocol for Broker Recruiting, which allows advisers to leave one firm for another and take basic client information, including names, contact details and account types, Alesia said.
Earning a base salary of $250,000 and a “substantial” bonus, Alesia was bound by a separate employment agreement not to solicit former clients for a year after leaving his position, according to the bank. The bank said it also obtained a court order barring him from soliciting former clients after taking him to arbitration.
A customer who was not named in the petition forwarded the bank unsolicited emails she received from Alesia, including a Dec. 8 message describing “hidden” fees and a Dec. 18 Bloomberg News article describing the bank’s more than $300 million settlement with federal regulators over whether it adequately disclosed conflicts of interest.
The largest U.S. bank by assets failed to tell customers that it reaped profits by putting their money into mutual funds and hedge funds that generated fees for the company, the Securities and Exchange Commission said. The bank also settled a parallel action by the Commodity Futures Trading Commission.
“I thought you might find this of interest,” Alesia wrote in the email to the customer, according to the petition. “Such a scare tactic is clearly designed to interfere with JPMorgan’s relationship with its client,” JPMorgan said.
The bank is seeking sanctions against Alesia and costs of bringing the suit.