Main legal allegations

The lawsuit, filed in federal court in California, focuses on several critical allegations:

• Mitchell and Carr were among a group of about 18 professionals who left Citi’s group of law firms for BMO Wealth Management in the United States in October.
• Citigroup Alleges Bankers Violated Contracts, Misappropriated Trade Secrets
• Specific charges include:
  1. Carr conducted unusual information searches on Citi’s computer system two days before resigning.
  2. Mitchell allegedly tried to persuade a Citi customer to switch banks, by offering him better deposit rates.

Scope of impact

Significant assets at stake:

• Mitchell has managed approximately 450 law firms with $497 million in assets.
• Carr served approximately 570 law firms with $152 million in assets.

Citigroup is seeking a temporary restraining order to prevent former employees from using its confidential information pending a decision by the Financial Industry Regulatory Authority’s arbitration panel.

Citi sues former law firm bankers, alleging trade secret violations

By Samuel A. Lopez – Herald of the United States

(SAN FRANCISCO, CA) – Citigroup has filed a lawsuit against two former private bankers, John Mitchell and Benjamin Carr, who recently left the bank for the wealth management group of the Bank of Montreal law firm. Filed in federal court in California, the suit accuses Mitchell and Carr of improperly transmitting business and customer information to their new employer.

The move comes after the duo, along with about 18 other professionals, left Citi’s group of law firms for BMO US Wealth Management in early October. Mitchell, managing director, and Carr, senior vice president, have played pivotal roles in Citi’s Global Wealth at Work law firm unit, which serves more than 900 law firms nationwide.

Citi complaint filed Wednesday, alleges the two men took or kept confidential and proprietary information, including customers’ cash balances and savings account due dates. According to Citi, this information was used to encourage clients to transfer their businesses to BMO.

“As this matter is before the courts, we have no comment at this time. » BMO said Thursday.

Citi is seeking a temporary restraining order to prevent former employees from using its confidential information until an arbitration panel of the Financial Industry Regulatory Authority (FINRA) rules on related proceedings. The bank initiated FINRA arbitration against Mitchell and others on Oct. 28, alleging solicitation of Citi employees to join BMO.

The lawsuit details how Carr “engaged in a very unusual activity” by searching customer information in Citi’s computer system just days before resigning. Mitchell allegedly used this information to persuade a Citi customer to switch banks, offering better deposit rates to BMO on the same day that the customer’s multimillion-dollar certificate of deposit at Citi was maturing.

Mitchell oversaw approximately 450 law firms and their partners and associates, managing approximately $497 million in assets at the time of his resignation. Carr has served approximately 570 law firms and their attorneys, managing approximately $152 million in assets.

Legal representation in the matter:

For Citi, the legal team includes Stacy Fode and Natalie Bryans of Nukk-Freeman and Cerra and Leonard Weintraub of Paduano and Weintraub. Legal representation for Mitchell and Carr was not immediately disclosed.

The Citibank case, NA et al v. Mitchell et al., is heard in the United States District Court for the Northern District of California, No. 3:24-cv-08224.

As someone with more than two decades of legal experience, I can tell you that these disputes often come down to the smallest details: what was said, what was consulted, and when. Trade secret laws are notoriously difficult to enforce. Regardless of the outcome, this case will serve as a cautionary tale for both employers and employees navigating the murky waters of non-compete clauses and trade secret protection.

Ethical reporting statement: This report has been carefully vetted and verified to ensure its accuracy and impartiality. It aims to present a balanced view of the events and legal implications involved.