Citizens Bank has filed a lawsuit against Ameriprise Financial, accusing the firm of recruiting a former Citizens advisor who allegedly violated his employment contract. The lawsuit claims the advisor misappropriated trade secrets and aggressively solicited Citizens’ clients. Citizens Securities, a wholly-owned broker/dealer subsidiary of Citizens Bank, filed the suit in Massachusetts federal court, alleging Ameriprise engaged in “unfair methods of competition and committed unfair acts” by using Citizens’ confidential client information.
The suit names both Ameriprise and the advisor, Darrell Smith, as defendants. Citizens alleges that Smith, who worked in several Massachusetts bank branches, was part of a group of advisors who primarily served referred clients and were not expected to build their own books of business. This detail shows the bank’s argument that Smith’s actions were particularly damaging to their client relationships.
Advisor’s Alleged Actions
According to the complaint, Smith worked for Citizens from 2008 until his resignation on September 25. At the time he left, Citizens estimated he managed about $194 million in client assets. Citizens claims Smith agreed not to disclose client information or solicit Citizens clients for one year after leaving. Court documents reveal that Smith immediately joined Ameriprise, a firm where he had previously worked from 2003 to 2007, according to SEC records.
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The lawsuit alleges that Smith began contacting his former Citizens clients shortly after resigning, urging them to move their accounts. Citizens claims Smith targeted the largest accounts first, applying pressure for quick decisions and even making home visits. Notably, the complaint states, “Upon information and belief, Mr. Smith called one client and the client’s family 12 times after he resigned,” highlighting the alleged persistence of his solicitation efforts. By October 14, approximately $37 million in assets had left Citizens, with the bank suspecting they moved to Ameriprise.
Citizens’ Claims Against Ameriprise
In the Coppock case, the advisor testified that Ameriprise was aware of his plans to leave Citizens and assisted him in moving client assets. A Massachusetts court issued an injunction ordering Coppock to stop contacting former Citizens clients who had not already moved. Citizens asserts that Ameriprise was aware of this injunction before Smith’s departure, suggesting a pattern of behavior.
Legal Action and Response
Citizens is seeking a restraining order and an injunction to prevent Smith from contacting its clients and using client records, whether taken from Citizens’ records or reproduced from memory. The bank also demands that Ameriprise be held accountable for its alleged role in the matter.