Charles Schwab is taking certainly one of its former reps to court docket, accusing him of being a “disloyal worker” who allegedly departed wielding commerce secrets and techniques on hundreds of Schwab shoppers.
Schwab filed a request in Texas federal court docket this week for a preliminary injunction in opposition to former Schwab worker Roberto Ortega. They’re looking for that the court docket bar him from allegedly soliciting Schwab shoppers or utilizing shopper data from his earlier employer whereas the events wait to begin FINRA arbitration.
In line with SEC data, Ortega joined Schwab in 2022 after earlier stints at Constancy and J.P. Morgan. When he left Schwab, Ortega was a vice chairman and monetary guide, overseeing shoppers with about $1.5 billion in collective property, most of whom have been situated close to Schwab’s financial institution department in The Woodlands, Texas.
In line with Schwab, Ortega didn’t develop these shoppers via his personal connections, however they got to him by the agency. The rep allegedly helped shoppers make a private monetary plan and companion with different Schwab staff on wants, together with property, schooling and retirement planning.
Schwab argued that they had supplied Ortega with “in depth” entry to shopper data to do his job and that there was no public supply for Ortega to entry identifies and call data of Schwab’s shoppers.
As a part of his employment settlement, Schwab claimed Ortega signed a contract specifying he would give 4 weeks’ discover earlier than leaving the agency, wouldn’t take confidential shopper data and wouldn’t solicit Schwab shoppers for 18 months after departing.
In line with the swimsuit, Schwab can observe when its reps entry its “Consumer Central” database, which incorporates shopper data. The agency alleged that Ortega logged into the database at 11:05 a.m. on Might 6 and “methodically accessed” 1,008 client-overview screens till 11:48 p.m. that evening. Over a day and a half, the rep accessed the database 1,689 occasions, and he continued to entry information on later dates, in accordance with Schwab,
In line with the swimsuit, within the “regular and historic course of enterprise,” Ortega would are likely to entry the database 10 occasions each day. Schwab additionally claimed Ortega was repeatedly accessing shopper “overview” screens, which contained primary details about shoppers, together with names and call data.
“From a timing perspective, Ortega’s entry was inconsistent with any legit enterprise objective—Ortega didn’t should be accessing Consumer Central in such giant numbers and at such late hours,” the grievance learn. “Moreover, as he labored his method via Consumer Overview screens, he did so in fast succession, reviewing one after one other and viewing a number of Consumer Overview screens in lower than one minute.”
As a substitute, Schwab speculated Ortega was copying or screenshotting the info. Within the grievance, the agency alleged one other worker noticed Ortega holding his telephone as much as his laptop display screen a number of occasions, hypothesizing he was taking pictures of shopper data.
On July 1, Ortega resigned with out discover and commenced working for the Arlington, Va.-based Nhabla. In line with its newest Kind ADV, the agency is an RIA with roughly $108,660 in managed property. Its principal homeowners have been Ortega and Johnny Medina (who additionally acted because the agency’s chief compliance officer). Ortega couldn’t be reached for remark previous to publication.
In line with Schwab, Ortega had contacted a number of shoppers, engaging them to maneuver their enterprise from Schwab. Moreover, the agency alleged Ortega accessed shopper databases for two,295 shoppers, although he solely labored with about 365 of them; Schwab alleged that Ortega additionally needed to take data on shoppers he didn’t service as a part of his job.
“Schwab considers the safety of shopper data and confidentiality to be of utmost significance and expects that its representatives will adjust to their contractual and authorized obligations,” a agency spokesperson mentioned in regards to the litigation. “We intend to implement our rights and maintain Mr. Ortega accountable for violating his obligations and taking Schwab’s confidential data.”
As a part of the swimsuit, Schwab requested Ortega return any shopper data he allegedly took and halt soliciting Schwab shoppers, because the agency accused him of doing. The agency requested that the court docket order all of the events to “proceed towards an expedited arbitration” in FINRA proceedings.