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Early in the morning on Sept. 9, three long-time financial advisors for the $17 billion First Technology Federal Credit Union abruptly resigned via email. Within hours of starting at their new investment firms, they used client lists they took from the San Jose, Calif.-based credit union and sent out a mass solicitation email. Within a month, the credit union lost more than $205 million and $1.1 million in recurring annual revenue, according to a lawsuit filed in U.S. District Court in Boise, Idaho last week.
First Tech asked a federal judge to issue a restraining order against LPL Financial, three other investment firms and former credit union financial investment advisors Alfred “Jack” Jackson, Sage Kendall and Kristina Hernandez, all of whom reside in Idaho. If granted, the order would prohibit them from soliciting First Tech members, require the return of client lists and compel them to submit their electronic devices for forensic review to remove any credit union data.
Before the lawsuit was filed, however, First Tech contacted the attorneys for the three former advisors and demanded they stop using the client lists and other data. Jackson, Kendall and Hernandez initially agreed to comply immediately. They also agreed to return the credit union’s data and submit their electronic devices for forensic imaging to ensure all traces of the stolen data were removed.
“Unfortunately, the Defendants failed to follow through with any of these commitments, and it is now apparent that their true objective was to move over as many assets as possible before they could be stopped,” the credit union alleged in its lawsuit.
The credit union lawsuit’s core allegation was that Jackson, Kendall and Hernandez stole confidential data, including client lists, and used them to solicit members in violations of contracts and trade secret laws. The client lists contained the names and contact information for all 683 customers whose assets held by First Tech totaled more than $520 million, according to court documents.
Although First Tech is neither a broker-dealer nor a registered investment advisor, it offers these investment services through the financial institution division of Raymond James Financial Services.
The credit union alleged that the sudden departure of Jackson, Kendall and Hernandez was part of coordinated effort that was planned for months.
In early 2025, Jackson and Kendall demanded First Tech confirm in writing they would be allowed to participate in a pilot program that would let advisors keep their book of business and take client names and contact details if they left. The program, structured for independent contractors, would have required advisors to cover their own business expenses in exchange for a higher share of generated revenue.
“Given that the future status of the program was unknown and with a management change on the horizon, First Tech denied that request as well,” the credit union explained in court documents. “Angry that they could not get their books of business for free, Mr. Jackson and Mr. Kendall set about how they could simply steal their assigned clients instead.”
That management change presumably referred to First Tech’s pending merger with the $12.7 billion Digital Federal Credit Union in Marlborough, Mass.
After the resignations of the former employees, the credit union launched an internal investigation and sent a cease-and-desist letter to them.
According to the lawsuit, Jackson, Kendall and Hernandez justified their use of First Tech’s customer lists by citing the Protocol for Broker Recruiting, an industry agreement that allows advisors to move between firms without litigation if certain conditions are met.
Under the Broker Protocol, advisors can take limited client data — names, addresses, phone numbers and account titles — if both the firm they leave and the firm they join are signatories. They must also notify the firm they are leaving in writing and leave a copy of the client list behind.
However, First Tech was never a signatory to the protocol, a fact the former advisors knew, the lawsuit claimed. While Raymond James is a protocol member, it cannot waive First Tech’s rights.
“Instead, their invocation of the Broker Protocol is merely to provide a cover and a plausible excuse to justify their naked misappropriation of their trade secret information directly owned, licenses and/or contractually possessed by First Tech,” the credit union stated in its lawsuit.
Additionally, First Tech alleges that LPL Financial in San Diego, Calif.; Osaic Wealth Inc. in Elizabeth, N.J.; Family Tree Financial and Riverside Financial Planning, both based in Eagle, Idaho; interfered with its contracts with the former advisors.
Jackson, Kendall and Hernandez joined LPL Financial. Jackson also launched Riverside Financial Planning last June. Kendall became a partner at Family Tree Financial, founded by Chris Eggleston. Osaic Wealth holds the securities registrations for Kendall and Eggleston, according to the lawsuit.
First Tech claimed LPL Financial and Osaic offered monetary or other incentives to entice the advisors, violating their confidentiality agreements. Osaic and Family Tree also allegedly interfered with Kendall’s confidentiality and non-solicitation obligations.
The three former credit union financial advisors and LPL Financial, Osaic Wealth, Riverside Financial Planning and Family Tree Financial did not respond to a CU Times request for comment.
As of Monday afternoon, the defendants have not responded to a CU Times request for comment and they have not answered First Tech’s lawsuit.
A court hearing for the credit union’s request for a temporary restraining order has not yet been scheduled.
Peter Strozniak can be reached at pstrozniak@cutimes.com.
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