Key Legal Allegations
The lawsuit, filed in California federal court, centers on several critical claims:
- Mitchell and Carr were part of a group of approximately 18 professionals who departed Citi’s Law Firm Group for BMO U.S. Wealth Management in October.
- Citigroup alleges the bankers breached contracts and misappropriated trade secrets
- Specific accusations include:
- Carr conducted unusual information searches on Citi’s computer system two days before resigning.
- Mitchell allegedly attempted to persuade a Citi client to switch banks, offering better deposit rates.
Scope of Impact
Significant Assets at Stake:
- Mitchell managed approximately 450 law firms with $497 million in assets.
- Carr serviced around 570 law firms with $152 million in assets.
Citigroup is seeking a temporary restraining order to prevent the former employees from using its confidential information pending a Financial Industry Regulatory Authority arbitration panel’s ruling.
Citi Sues Ex-Law Firm Group Bankers Alleging Trade Secret Violations
By Samuel A. Lopez – USA Herald
[SAN FRANCISCO, Calif.] – Citigroup has filed a lawsuit against two former private bankers, John Mitchell and Benjamin Carr, who recently left the bank for Bank of Montreal’s law firm wealth management group. Filed in California federal court, the lawsuit accuses Mitchell and Carr of improperly taking business and client information to their new employer.
This move comes after the duo, along with about 18 other professionals, departed Citi’s Law Firm Group for BMO U.S. Wealth Management in early October. Mitchell, a managing director, and Carr, a senior vice president, played pivotal roles in Citi Global Wealth at Work’s law firm unit, which serves over 900 law firms nationwide.
Citi’s complaint filed on Wednesday, alleges that the pair took or retained confidential and proprietary information, including clients’ cash balances and the maturity dates of savings accounts. This information, Citi claims, was used to solicit clients to switch their business to BMO.
“As this matter is before the courts, we have no comment at this time,” BMO stated on Thursday.
Citi is seeking a temporary restraining order to prevent the former employees from using its confidential information until a Financial Industry Regulatory Authority (FINRA) arbitration panel rules in a related proceeding. The bank initiated a FINRA arbitration against Mitchell and others on October 28, alleging the solicitation of Citi employees to join BMO.
The lawsuit details how Carr “engaged in highly unusual activity” by searching for client information on Citi’s computer system just days before resigning. Mitchell allegedly used this information to persuade a Citi client to change banks, offering better deposit rates at BMO on the same day the client’s multi-million-dollar certificate of deposit at Citi matured.
Mitchell oversaw about 450 law firms and their partners and associates, managing approximately $497 million in assets at the time of his resignation. Carr serviced around 570 law firms and their lawyers, handling about $152 million in assets.
Legal Representation in the Case:
For Citi, the legal team includes Stacy Fode and Natalie Bryans of Nukk-Freeman & Cerra and Leonard Weintraub of Paduano & Weintraub. The legal representation for Mitchell and Carr has not been immediately disclosed.
The case, Citibank, N.A. et al v. Mitchell et al, is being heard in the U.S. District Court for the Northern District of California, No. 3:24-cv-08224.
As someone with over two decades of legal experience, I can tell you these disputes often hinge on the tiniest details—what was said, what was accessed, and when. Trade secret laws are notoriously tricky to enforce. Regardless of the outcome, this case will serve as a cautionary tale for both employers and employees traversing the murky waters of non-compete clauses and trade secret protections.
Ethical Reporting Statement: This report has been carefully fact-checked and verified to ensure accuracy and impartiality. It aims to present a balanced view of the events and legal implications involved.
