Fortrend Securities alleges Shaw and Partners used stolen customer information
Fortrend Securities has alleged in court that two of its former brokers took confidential information to their new employer in order to poach customers.
Claims of theft and misuse have been played out in court, including allegations two brokers at the centre of a bust-up between Shaw and Partners and Fortrend Securities planned their exit and took internal customer documents on their way out.
Heavily redacted documents filed with the Federal Court have shed light on the dispute which has resulted in several senior figures at Shaw and Partners being restrained from signing on new customers or speaking publicly.
The Joe Forster-headed operation alleges its former employees told their clients they would soon be moving to Shaw and Partners “and encouraging those clients to move their accounts to Shaw”.
Fortrend Securities’ statement of claim alleges Christoper Wollerman and Stephen Lyle, who both left the firm on December 16, staged their exit by taking secret customer information.
The two men put in their notice that they would quit the firm on November 18 before allegedly destroying “some FSA property by reformatting or otherwise deleting data
on their devices”.
Fortrend Securities alleges that after the two men put in their notice they both took “extended periods of sick leave, and failed to comply with directions by Mr Forster to assist in the training of their replacement and the orderly transition of FSA clients they assisted to alternative staff within FSA”.
The statement of claim alleges the two men “on various dates in October and November 2022” downloaded Fortrend data on to their personal USB devices, “thereby taking the FSA property into their personal possession”.
While the two men finished with Fortrend Securities on December 16, the firm alleges Mr Wollerman and Mr Lyle both began moves to send clients to Shaw and Partners from “around June 2022”.
Fortrend Securities alleges Mr Lyle and Mr Wollerman conspired with Shaw and Partners “to solicit FSA clients to begin using the services of Shaw and/or a new entity to be set up Wollerman and Lyle (LWAM pty ltd)”.
It also alleges the two brokers began acting as advisers of Shaw “whether under employment agreement or in a de facto capacity” from at least June 2022.
Fortrend Securities claims that on November 18, the same day the two men resigned, Shaw and Partners Melbourne office manager Lisa Taranto began contacting its clients, sending “unsolicited ‘welcome letters’ to FSA clients which contained FSA property”.
The firm claims Shaw and Partners also began “making unsolicited telephone contact with FSA clients using their contact information taken from FSA”.
“By reason of the foregoing, certain FSA clients have ceased using FSA’s services and have begun using the services of Shaw and/or LWAM,” Fortrend Securities alleges.
“FSA clients have been contacting FSA to raise their concerns about the appropriation of their personal information by Lyle and Wollerman, without their consent.”
Fortrend Securities claims these actions are in breach of confidentiality and non-compete and non-solicitation obligations.
“FSA has lost and will lose significant commissions and fees it would have earned from the solicited clients,” Fortrend Securities claims.
“FSA has also had its property destroyed and has suffered, and is suffering, reputational harm. FSA is presently unable to quantify the damage to the value of its business.”
Justice Michael O’Bryan on Wednesday banned Mr Lyle and Mr Wollerman from transferring any customer accounts and ordered them to hand over their electronic devices for inspection.
The case is due to return to court on February 1, but Shaw and Partners co-chief executive Earl Evans told The Australian earlier this week the firm intended to contest the allegations.
“It is fair to say we don’t agree with any of the claims and over the next week I’m sure it will get sorted out,” Mr Evans said.
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