Wells’ Broker Unit Sues Merrill Over Recruiting
Wells Fargo & Co.’s brokerage unit has sued Merrill Lynch & Co., accusing the nation’s largest brokerage firm of running a campaign to recruit its top producers and learn the names of clients with billions of dollars in investment accounts.
Wells filed suit Tuesday in Los Angeles County Superior Court against Merrill and Catherine Miller, who left Wells as a senior financial consultant less than two weeks ago.
The suit alleges that Miller took with her confidential information on as many as 1,000 accounts, with about $175 million in investments. These clients had been referred from the banking arm of San Francisco-based Wells, and several have already been solicited by Merrill brokers, the suit said.
“These actions are but the latest salvo in a continuing campaign by Merrill Lynch to hire Wells Fargo’s most productive brokers and to gain access to Wells Fargo’s most valued customers,” the suit said.
Superior Court Judge Robert O’Brien issued a temporary restraining order directing Miller to return “Rolodex information,” though he declined to order Merrill not to recruit her clients.
“We absolutely deny any allegation of wrongdoing or inappropriate conduct,” Merrill spokesman Bill Halldin said. “Unfortunately, these types of suits are routine.”
Michael Robbins, an attorney for Miller, argued that Merrill brokers have gone to work for Wells in Los Angeles during the last year.
“This happens in a lot of industries--it’s not unique to banking,” said Bert Ely, a banking analyst in Alexandria, Va. “But as banks get drawn more [into] the brokerage industry, they are going to get sucked up in this even more.”
The suit is part of a larger problem in many businesses about what information workers can take with them when they leave a company.
“It’s becoming a more serious issue as more of an employee’s value is what’s in their head,” Ely said.
The suit claims four other Wells consultants in California have gone to Merrill since 1992, resulting in the loss of more than $1 billion in client money.
