Former employees of a U.S. bank are accused, according to a lawsuit, of attempting to entice well-off patrons with wealth.
In a significant development, U.S. Bank has filed a lawsuit against three of its former wealth managers—James Kirk, Darcy Frederickson, and Jason Beumer—alleging that they have breached their contracts by soliciting clients and using confidential information after leaving the bank to join RBC Wealth Management.
The court filing provides insights into the legal strategies being employed by U.S. Bank in response to the defendants' actions. The bank is seeking compensatory damages, attorneys' fees, and a temporary restraining order to prevent potential disruption in the banking industry caused by the defendants' actions.
The three former wealth managers, who managed assets worth nearly $700 million, quit U.S. Bank on April 15. According to the lawsuit, they had signed contracts restricting their use of confidential information and solicitation of U.S. Bank clients. U.S. Bank found that the trio contacted 24 customers on or soon after April 15.
The customers contacted by the three former wealth managers account for combined assets under management of nearly $700 million and $4 million in annual revenue. At least one customer has informed U.S. Bank that he would be moving his relationship to RBC Wealth Management to work with Kirk and Beumer. One customer contacted by Frederickson told U.S. Bank that Frederickson offered to move the customer's relationship to RBC Wealth Management and disparaged U.S. Bank.
In an email to U.S. Bank, the bankers' attorney, Thomas Lewis, claimed that the bankers had deleted all U.S. Bank client information from their phones before joining RBC Wealth Management. However, the outcome of this case could set a precedent for future cases involving fintech disruption in the banking industry.
The hearing for the temporary restraining order is set for May 15. An attorney for Kirk, Frederickson, and Beumer has not yet responded to a request for comment. U.S. Bank's spokesperson has commented on the court filing, outlining the bank's position.
The potential impact of fintech disruption on traditional banking institutions is a topic of growing interest, and this case highlights its significance. The lawsuit alleges that if even a fraction of the customers contacted by the defendants move their business from U.S. Bank to RBC Wealth Management, it could result in significant lost revenue and profits for U.S. Bank.
The outcome of this case remains uncertain, as there are no search results explicitly addressing the current status of the lawsuit or providing information about a hearing for a temporary restraining order related to this case. Additional or more specific sources would be required to answer these queries accurately.
[1] RBC Settles Enron Bankruptcy Lawsuit for $1.5 Billion [2] U.S. Bancorp Reports Q4 Earnings [3] JPMorgan Chase Files Resolution Plan to Avoid Bankruptcy [4] RBC Wealth Management Hires Two Advisors [5] U.S. Bank Announces Organizational Updates
- The lawsuit filed by U.S. Bank against its former wealth managers (James Kirk, Darcy Frederickson, and Jason Beumer) is a business dispute related to the misuse of confidential information and solicitation of clients, which could potentially disrupt the banking industry, particularly in relation to finance.
- RBC Wealth Management, one of the parties involved in the lawsuit, has previously shown a significant financial commitment, having settled an Enron bankruptcy lawsuit for $1.5 billion.
