Thirty advisors caught between “two corporate behemoths” after joining LPL Financial from Ameriprise no longer have to relinquish their personal devices for a third-party examination for improperly retained client data.
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That’s the upshot of a revised order approved by Judge Jinsook Ohta of the U.S. District Court for the Southern District of California on Wednesday. Ohta’s update keeps most of the language of an initial order he signed in December 2024 in response to an Ameriprise lawsuit accusing LPL of a “widespread pattern and practice of harvesting and misappropriating Ameriprise’s private, confidential client information and trade secrets.”
But, in response to “significant factual changes,” it crosses out a paragraph originally directing 30 advisors who had moved from Ameriprise to LPL to hand over their cell phones, computers and other personal devices to a specially appointed forensic examiner.
Ohta’s initial order had responded to the recruiting lawsuit Ameriprise filed in July 2024 by calling on LPL and the recruited advisors to make copies of any client data they may have obtained through improper means. Ameriprise has accused LPL of retaining the names, addresses, Social Security Numbers and similar data of clients who did not follow the advisors who had switched firms.
Ohta directed any such information to be preserved for use as evidence when the firms attempted to resolve their dispute before a Financial Industry Regulatory Authority arbitration panel.
In an initially unsuccessful motion to intervene in the dispute, the 30 former Ameriprise advisors recruited to LPL argued they had never been consulted on, nor consented to, the requirement that they turn over their devices. They were caught, they said, in a massive recruiting dispute between “two corporate behemoths.”
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Why Judge Ohta revised his initial order
In Wednesday’s order, Ohta wrote that “significant factual changes have rendered enforcement of the forensic review requirement for advisors and their devices no longer equitable.” Ohta noted that when he issued his initial directive in late December 2024, only Ameriprise and LPL had agreed to resolve their dispute using FINRA arbitration.
Since then, Ameriprise has also started arbitration against each of the 30 recruited advisors. “Nine of those advisors have been dismissed from the arbitration entirely, rendering any preliminary injunction against them unwarranted,” Ohta wrote.
Ohta also noted that a hearing on the possession of the contested information is scheduled for Oct. 5. “With the merits hearing only a few months away, the forensic review measures no longer serve the preliminary relief function the parties and the Court intended,” he wrote.
Ameriprise declined to comment on the judge’s order. LPL did not return a request for comment.
After Ohta rejected the advisors’ objections to having to relinquish their devices, they responded by filing an appeal in the Ninth Circuit Court. Three appellate judges later found that the lower court had “abused its discretion” in rejecting the advisors’ motion to intervene and sent the dispute back to Ohta.
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LPL required to identify, delete records for improperly retained data
Under Ohta’s revised order, LPL remains responsible for searching its records for any improperly obtained information on Ameriprise clients. LPL is also required to tell Ameriprise of any client data that may have been retained so that Ameripise can decide “whether it must make notification to customers and what information to include in the notification to customers.”
In a declaration filed on Monday, LPL’s attorney Alexander Madrid testified that LPL has lived up to its obligation to make copies of and then erase any client data that may have been improperly kept.
“This process was comprehensive, technical, and multi-layered, requiring significant time and resources to complete,” Madrid wrote. “LPL began the process on January 10, 2025. Data deletions from LPL’s systems were completed between March 14 and April 9, 2026.”
LPL’s use of a ‘bulk upload tool,’ and other recent disputes with Ameriprise
Ameriprise’s initial lawsuit in the recruiting dispute accused LPL of using a “bulk upload tool” from 2018 to the start of 2022 to help recruited advisors transfer confidential customer data. LPL has said it has since stopped using the tool.
LPL Financial and Ameriprise have been caught up in a long series of court battles in the past year and a half over LPL’s recruiting practices. In March, a FINRA arbitration panel ordered LPL and a recently recruited father-son advisor team to pay $200,600, plus interest, over claims that they had violated contracts and industry recruiting standards.
Lawyers for LPL and the recruited advisors noted the award fell short of Ameriprise’s initial request for punitive damages. The panel also rejected Ameriprise’s request to require the advisor duo and LPL to return any documents they may have taken and to bar them from reaching out to former clients.
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