Credit Suisse Securities (USA), LLC and Annick Iwanowski

Defeated efforts to have injunction entered against financial advisor who resigned and joined a competitor based on alleged breaches of non-compete allegations in employment agreement.

The firm represents Ms. Iwanowski and Credit Suisse Securities (USA), LLC.  Ms. Iwanowski, a financial advisor, resigned from SunTrust Bank to join Credit Suisse. This federal court case was initiated by SunTrust Bank to seek a temporary restraining order and preliminary injunction and damages against the defendants for alleged breaches of non-solicitation and confidentiality provisions, alleged misappropriation of trade secrets, breach of fiduciary duty, and tortious interference with advantageous business relationships and contracts.  Gary Betensky and partner Leora Freire, together with co-counsel Stephen Kramarsky, submitted opposition affidavits and memoranda of law opposing the relief sought. Thereafter, Judge Lawrence King convened an emergency hearing.

The firm, through Mr. Betensky, argued that before joining Credit Suisse, Ms. Iwanowski was a registered representative of SunTrust Investment Services, Inc. (“STIS”).   STIS is an affiliated broker-dealer company of SunTrust Bank (“Sun Trust”).  STIS is also a signatory to an agreement entered into by broker-dealers and independent financial firms (“Protocol” agreement), which allows a registered representative who moves between Protocol firms to retain a list consisting of the names and contact information of clients she has serviced for the firm (a “Protocol List”), and to immediately begin soliciting the clients on her Protocol List on behalf of her new firm, regardless of any post-employment restrictions that would otherwise prevent her from soliciting these clients. The express aim of the Protocol is to further customer choice with respect to their registered representatives.

Here, Iwanowski moved from one Protocol firm (STIS) to another (Credit Suisse).  Mr. Betensky argued that with the Protocol in place, SunTrust’s claims hinged on the inapplicability of the Protocol to Ms. Iwanowki.  Mr. Betensky posited to the Court that SunTrust’s Protocol argument would fail and therefore SunTrust failed to demonstrate a substantial likelihood of success on the merits.  Mr. Betensky also argued that other than the request for injunctive relief, all other claims by SunTrust were improperly before the Court in that they had to be brought in arbitration.

Judge King denied SunTrust’s motion for injunctive relief finding that SunTrust failed to demonstrate a substantial likelihood of success on the merits.  Thereafter, the parties jointly stipulated to the dismissal of the federal court action.  The matter is scheduled for final hearing in FINRA arbitration in late 2016.