A federal judge in San Diego has lifted a requirement that 30 financial advisors surrender their personal devices for forensic review in the ongoing recruiting dispute between Ameriprise Financial and LPL Financial. The ruling, issued by U.S. District Judge Jinsook Ohta on May 6, modifies a prior stipulated order that had mandated imaging and deletion of disputed client data from the advisors' electronics.
The legal battle began in July 2024, when Ameriprise accused LPL of using a so-called "bulk upload tool" to systematically direct recruited advisors to transfer confidential client information, including Social Security numbers and account numbers, from Ameriprise systems. Ameriprise argued that the practice exposed advisors to "regulatory and criminal exposure."
In her order, Judge Ohta wrote that because all 30 advisors have been added as direct parties to a Financial Industry Regulatory Authority (FINRA) arbitration hearing scheduled for October, the forensic review measures "no longer serve the preliminary relief function the parties and the Court intended." She added that it was "no longer equitable" to impose the process on advisors who had not agreed to it. Nine of the 30 advisors have since been dismissed from the arbitration entirely.
The ruling deletes Paragraph 4 of the stipulated order, which had required forensic review, imaging, and deletion of disputed client information from the advisors' personal devices. The decision comes as the industry watches closely, given the scale of the firms involved. Ameriprise and LPL are two of the largest broker-dealers in the U.S., with LPL managing over $1.5 trillion in advisory and brokerage assets as of early 2025.
In a related development, LPL attorney Alexander Madrid of McGuireWoods LLP wrote to the court on May 4, two days before the ruling, stating that LPL had deleted the Excel spreadsheet known as the "Bulk Upload Tool" and underlying data for customers whose information was provided to LPL but who did not become LPL customers. Madrid said the deletion process began in January 2024 and continued through April 2025, describing it as "comprehensive, technical, and multi-layered."
LPL believes all deletions are complete and does not expect additional work, though it would delete any further information discovered, after copying and segregation, in accordance with the stipulated order. Ameriprise declined to comment on the ruling, and LPL did not respond to a request for comment before publication.
The case highlights the ongoing tensions in the recruiting wars among large broker-dealers. Similar disputes have arisen in recent years, such as when LPL and Osaic captured a $1.4 billion advisor team in a dual breakaway from Raymond James. The outcome of the FINRA arbitration could set precedents for how client data is handled during advisor transitions.
For now, the 30 advisors—most of whom have already transitioned to LPL—are no longer subject to device searches, though the underlying allegations of data theft remain unresolved. The arbitration hearing in October will likely address whether LPL's use of the bulk upload tool violated industry rules or contractual obligations.
