Bank of America Corp. won a court order temporarily blocking four former employees from using and sharing the bank’s client records at their new employer, New York-based Dynasty Financial Partners.
Bank of America alleged yesterday in a complaint in New York state court that taking the records from the bank’s U.S. Trust unit to Dynasty Financial amounted to trade-secret theft. The employees claimed in their resignation letters that they were allowed to take the records under a voluntary recruiting agreement among brokers, according to the complaint.
Bank of America said in court filings that the records reveal “comprehensive information regarding every aspect of a client or potential client’s financial information,” including bank account identification and names of advisers, accountants and attorneys.
The suit names as defendants Dynasty Financial, Brown, Charles F. Britton, Marcus Wilson and Amanda Kerley. Dynasty Financial, which offers technology and services for independent advisory firms, was founded by ex-Citigroup managers Todd Thomson and Shirl Penney.
Read more about the case on Bloomberg.
So where does it tell us in privacy policies that if our broker leaves, our records can go with them to wherever they go next?
The main take-home messages, of course, is that we may have no idea where our sensitive financial information has gone, but in any event, it’s clearly not ours to control, but the property of the banks or firms. Did anyone ask the BofA customers whether they wanted their account information transferred to another firm before it moved on? I’d bet they didn’t. And if the defendants are right that there has been some “voluntary agreement” among brokers that gives them rights to make our information portable, it may even be legal for them to pack up your data with their coffee mug and desk plant when they move on to another employer.
Although BofA may view this as “trade secrets,” the bottom line is that our sensitive information does need protection and consumers should know if employees can just take our information with them when they change jobs.
Any lawyers care to jump in and explain the law on this or comment?