The Towry allegations

The court case brought by Towry against IFA firm Raymond James and seven former Edward Jones advisers cenred on allegations that advisers breached non-solicitation clauses in their restricted covenants and solicited clients.

Towry made the allegations after the advisers declined to join the firm following its acquisition of Edward Jones in October 2009, instead joining Raymond James. Towry tried to reclaim £6m in damages for the alleged client poaching. It claimed nearly 400 clients transferred investments worth over £33m from Towry EJ Limited to Raymond James shortly after the deal completed.

Towry’s allegations:

  • The seven advisers solicited up to 388 clients worth more than £33m to move with them to Raymond James in breach of the non-solicitation clauses in their Edward Jones contracts.
  • Towry suffered £5.8m in lost business as a result of this solicitation.
  • Raymond James offered inducements to seven former Edward Jones advisers to breach their contracts.
  • Raymond James conspired with one or more of the advisers to breach their contracts.
  • In three separate instances, advisers conspired with each other to breach their Edward Jones contracts (Towry dropped conspiracy allegations in July in its closing submission).
  • Advisers used confidential client information to solicit business and it was “overwhelmingly likely” this was passed on to Raymond James.

High Court judge Mrs Justice Cox this week dismissed all claims against all the defendants, stating that Towry had failed to prove the allegations of wrongful conduct against Raymond James and the seven advisers. The judge also expressed surprise that allegations of conspiracy had not been dropped earlier in the case.