Schwab Seeks to Block Former Advisor From Soliciting Clients

“In the weeks and months following his departure, Schwab discovered the scope and extent of the misconduct Ortega committed, both during and after his employment,” the complaint states. “A review of Ortega’s computer activities in the weeks leading up to his departure from Schwab, along with eyewitness testimony, strongly suggest that Ortega intentionally and maliciously misappropriated confidential and trade secret client information.”

Specifically, the lawsuit suggests Ortega reviewed nearly 1,700 client-overview screens in a proprietary Schwab database in early May — including after normal business hours. Ortega allegedly repeated this pattern of activity over the next few weeks.

“Moreover, multiple reports from Schwab’s clients indicate that Ortega has used, and is presently using, Schwab’s misappropriated trade secrets in furtherance of wrongful solicitation of its clients,” the complain states.

The lawsuit argues Schwab and Ortega are obligated to arbitrate the merits of this dispute consistent with the arbitration rules and regulations of FINRA. Accordingly, concurrently with the filing of its court action, Schwab has also filed a statement of claim with FINRA Dispute Resolution seeking binding arbitration of the dispute pursuant to FINRA Rule 13804.