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Fidelity Wins Restraining Order Against Departing Advisor

November 28, 2018

The retail brokerage arm of Fidelity Investments has won a temporary restraining order against one of its former advisors and the independent wealth management practice he left for, according to news reports.

Robert Keating had been with Fidelity for 15 years before leaving earlier this month for a New York office of Omaha-based WealthPlan Advisors, a network of around 20 registered investment advisors, according to AdvisorHub.

Last week, Fidelity filed its TRO request in federal court in the southern district of New York, including a deposition from Keating’s former manager who said that he had solicited a client while he was still employed by Fidelity, the industry news website writes.

Keating allegedly told the client he was moving to a large competitor, and when the client met him at an office space Keating shared with another Fidelity alum in Manhattan, the client complained, according to AdvisorHub.

Judge Jed Rakoff issued the preliminary injunction that bars Keating and WealthPlan from soliciting clients Keating had received through his work at Fidelity, requires both Keating and the firm to post a $10,000 injunction bond and requires Keating to return what Fidelity says are its records as well as appear at a deposition, the website writes.

Keating is registered with Finra through Securities America, whom Fidelity didn’t name in its TRO filing, according to AdvisorHub. Keating and WealthPlan owner Todd Phelps didn’t return the website’s requests for comment.

Robert Taylor, the managing partner of the WealthPlan New York office, tells AdvisorHub that Keating is looking for a lawyer and didn’t comment further. Taylor, who opened the office last summer, had been with Fidelity for 22 years, the website writes. Fidelity didn’t take action against him, according to AdvisorHub. Lawyers for Fidelity didn’t return the website’s requests for comment, while a person familiar with the matter tells AdvisorHub that the case will head to arbitration by a Finra panel.

Fidelity filed restraining orders in July against former brokers in Connecticut and Arizona, and the firm’s rival Charles Schwab has taken similar actions against departing advisors, according to the website. Discount brokers have argued in their lawsuits that they are more entitled to lay claim to customer data than full-service brokerages because advisors at discount brokerages often build their business from leads from the firms’ call centers, AdvisorHub writes.

By Alex Padalka
  • To read the AdvisorHub article cited in this story, click here.