New details have surfaced in the case of Toronto-Dominion Bank’s lawsuit against one of its former advisors who departed for Raymond James Financial Inc., Advisor Hub reports.
As we reported last month, Gregg Desmarais was one of two advisors sued for allegedly breaking their non-solicitation agreements.
TD Bank and its subsidiary, TD Private Client Wealth, filed the suit against Desmarais and Brett Bartkiewicz, contending that they signed agreements to maintain the bank’s confidentiality and trade secrets and that for 12 months after the end of their employment at TD Private Client Wealth, the two agreed they would not contact, call upon or solicit any client to lure their business from the bank. But after departing, the two allegedly contacted at least 12 TD customers directly offering discounts in fees or product deals to move their business to Raymond James. TD says it lost at least 10 accounts worth over $22 million in value.
The new information, according to AdvisorHub, is that a disclosure filed with the Financial Industry Regulatory Authority states that Desmarais voluntary left TD Bank after the firm began an internal review over suspected violations of anti-money laundering policies. TD is currently under investigation by the U.S. Department of Justice, bank regulators and the Treasury Department over allegations of failing to detect money laundering and other financial crimes at several of the bank’s U.S. branches, and could reportedly face fines of up to $4 billion.
Desmarais’s FINRA profile, under the category of “employment separation after allegations,” states: “An internal review was initiated of the Representative’s actions based on the suspected violation of firm Anti-Money Laundering (AML) policy by the Representative.”
A spokesperson for TD Bank did not comment on the lawsuit against Desmarais, but said the internal review was not related to the bank’s broker AML investigation and is also not connected to the lawsuit over the non-solicitation agreement. The company said it is conducting a comprehensive overhaul of its anti-money laundering program.
“Mr. Desmarais denies TD’s baseless allegations,” Michael Roche, a lawyer representing Desmarais in the lawsuit, said by email. “I would also like to note that TD’s lawsuit against my client has nothing to do with TD’s AML issues.”
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