Citizens Sues Ameriprise and Former Employer
Citizens Bank has filed a lawsuit against Ameriprise Financial, alleging that the firm recruited a former advisor who subsequently violated his employment contract by misappropriating trade secrets and aggressively soliciting the bank’s clients.
Citizen Securities (a broker/dealer wholly-owned subsidiary of Citizens Bank) filed the suit against Ameriprise and its former employee, Darrell Smith, in Massachusetts federal court last week, and claimed Ameriprise used “unfair methods of competition and committed unfair acts” when allegedly using Citizens’ trade secrets.
According to the complaint, Citizens hired Smith in 2008 as an advisor, working in several Massachusetts bank branches. In the suit, Citizens alleged that most of its advisors were based in bank branches and worked with referred clients (and thus weren’t expected to build their own books of business). Citizens also alleged that as part of his employment, Smith agreed not to disclose what he learned about clients after leaving the firm, and that he wouldn’t be allowed to solicit Citizens clients for one year after leaving. At the time he left, Citizens estimated he managed about $194 million in client assets.
According to court documents, Smith resigned from Citizens on Sept. 25 and immediately joined Ameriprise (where he’d worked between 2003 and 2007, according to SEC records). Citizens claims that in the days after quitting, Smith reached out to his former clients, asking them to move their accounts to Ameriprise; the firm said Smith started with the largest accounts he managed. According to Citizens, Smith “pressed” clients to make quick decisions and even visited them at their homes.
“Upon information and belief, Mr. Smith called one client and the client’s family 12 times after he resigned,” the complaint read. “He told clients that Ameriprise had brought in a team to help him move his clients, that the team would leave at the end of the week of October 5, 2026, and that they had to decide by then.”
According to Citizens, Smith didn’t need to copy information to solicit clients, but “knew from his work at Citizens which clients he served and how to reach them.” Citizens said that by Oct. 14, about $37 million in assets had left Citizens, and the firm suspects they moved to Ameriprise.
Citizens purports that Ameriprise assembled personnel to help Smith move his clients to Ameriprise, and that they planned the transfers before Smith resigned. Additionally, Citizens noted that the firm already took Ameriprise to court this year regarding Scott Coppock, another advisor who moved firms.
According to Citizens, Coppock testified that “Ameriprise knew he was leaving Citizens and helped him move clients’ assets after he resigned,” and that a Massachusetts court ordered Coppock not to contact former Citizens clients that hadn’t already moved. Citizens claims Ameriprise was aware of this injunction before Smith moved.
Representatives from Citizens declined to comment. Officials from Ameriprise did not respond to a request for comment prior to publication.
In the complaint, Citizens is seeking a restraining order and an injunction prohibiting Smith from contacting Citizens’ clients and from using Citizens’ client records “whether taken from Citizens’ records or reproduced from memory,” among other demands.
