JP Morgan sues ex-exec for giving info to rival firms
NEW YORK (Reuters) - JP Morgan Securities on Monday filed a lawsuit against a former executive who managed more than $200 million in wealthy clients' assets, accusing him of sharing sensitive information with other firms and trying to steer clients to rival firm Morgan Stanley.
Later in the day, an attorney representing JP Morgan said the complaint was being amended on Monday night to remove all references to Morgan Stanley (MS.N). The lawyer said it was an error to name any firms in the suit because the firms were not known, but the lawsuit was not about Morgan Stanley.
JP Morgan Securities, a unit of JPMorgan Chase & Co (JPM.N), is seeking a temporary restraining order and preliminary injunction to preserve the status of a pending arbitration.
In papers filed in U.S. District Court in New York, JP Morgan said Argentine Hernan Arbizu, who worked in its private banking department, was responsible for handling "high net worth individuals" and their related businesses in Argentina and Chile for the company.
The amended complaint will accuse him of attempting to induce JP Morgan clients to take their business away from JP Morgan, the attorney said.
Arbizu, who lived in Connecticut while employed with JP Morgan, fled to Argentina just before being fired last month, court papers said. He allegedly took stolen documents with him.
"Defendant engaged in such wrongdoing prior to and after the time he was terminated from JPMorgan," the attorney said the amended complaint would read, removing a reference to Morgan Stanley.
JP Morgan said it discovered evidence last month that Arbizu had made unauthorized and illegal wire transfers between the account of a JP Morgan client and accounts at other firms.
The suit also claims that Arbizu stole confidential and proprietary information and assets belonging to JP Morgan and its clients.
The company said it has not yet ascertained the full extent of damage caused by Arbizu's actions but added that it believes "a thorough investigation will reveal criminal conduct beyond the contractual, common-law and statutory violations detailed in this affidavit."
The suit claims that the defendant has confessed his wrongdoing and stated that he feared that returning to the United States would result in his arrest.
It argues that without the injunction and restraining order, JP Morgan and its clients will suffer further irreparable harm.
JP Morgan has asked the court to stop the defendant from using, disclosing, transmitting or destroying any documents belonging to it or its clients. It seeks the surrender and return of all JP Morgan materials in Arbizu's possession and asks that he be stopped from attempting to induce any of its clients to do business with other firms.
The company also asked the court's help in questioning the defendant under oath and is seeking attorneys' fees and costs.
In addition, JP Morgan said it was filing a claim against Arbizu with the Financial Industry Regulatory Authority.
(Editing by Gary Hill)
