A California-based credit union whose reps register with Raymond James is suing LPL Financial, Osaic and several former employees for a “deliberate misappropriation of trade secrets,” claiming advisors leaving the firm took privileged information about all their customers.

First Tech Federal Credit Union filed the suit in Idaho federal court, claiming Idaho residents (and registered reps) Alfred “Jack” Jackson and Kristina Hernandez resigned in September without notice to join LPL, while Sage Kendall quit at the same time to move to Osaic.

First Tech is not a broker/dealer or RIA and instead offers advisor services through Raymond James’ Financial Institutions Division and Financial Services Advisors (registered with FINRA and the SEC, respectively). According to SEC records, Jackson registered in the industry with Raymond James in 2006, Hernandez in 2024, and Kendall with numerous firms since 2006, before registering with Raymond James in 2012.

According to First Tech’s complaint, the trio conspired for months between themselves (and their soon-to-be employers) before resigning on Sept. 9. Jackson and Hernandez joined LPL via Jackson’s newly formed company Riverside, while Kendall affiliated with Osaic and the firm Family Tree. 

First Tech alleged that on the night before their resignation, the representatives were seen copying “stacks of documents,” and claimed Jackson’s logins to a company portal (including client information) jumped from zero early in the year to 13 to 19 times per month in the stretch leading up to his departure.

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According to the complaint, the departing reps claimed they were protected by the Protocol of Broker Recruiting, established in the early 2000s to curb a rise in intra-broker/dealer lawsuits over departing advisors soliciting former clients after joining new firms. The protocol allows (but limits) resigning reps to take limited client information. 

While LPL and Osaic are signatories to the protocol, First Tech argues that it has never signed the protocol, a fact that it alleges is well known to its financial advisors. 

“Given their intimate familiarity with the Protocol—coupled with the public nature of who is a Protocol member—it is unquestionable that both LPL and Osaic knew that First Tech was not a Broker Protocol member—yet each knowingly allowed their new hires to take and use a complete customer list anyway,” the complaint read.

Additionally, while First Tech reps register with Raymond James (which is a Protocol signatory), First Tech argued that this doesn’t impact its case, and that while Raymond James’ Financial Institutions Division “may be able to waive its own rights, it lacks the authority to waive the rights of others.”

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Osaic declined to comment, noting it refrains from speaking about any ongoing litigation. Raymond James and LPL did not return a request for comment prior to publication.

According to First Tech, the assets from the complete client list that the defendants took totaled approximately $520 million. The firm estimates that it has already lost over $205 million in assets and more than $1.1 million in recurring annual revenue due to client transfers. 

In the complaint, they allege the reps agreed to cease using the information, as well as to “forensic imaging” of their electronic devices to remove allegedly stolen information, but First Tech claims they never followed through, and the plaintiffs now think they’re trying to move as many assets as possible “before they could be stopped.”

In the suit, First Tech is seeking an immediate temporary restraining order, as well as damages.