Citibank claims former executives solicited its law firm clients

Citibank N.A. accused two former banking executives from its law firm division of misappropriating Citibank's client information and soliciting employees to join their new employer, BMO Wealth Management.

According to the complaint, filed in the Northern District of California on Nov. 20, John Mitchell and Benjamin Carr solicited "virtually all" of the employees from Citibank's Law Firm Group "to resign in concert" with them on July 19 to move to BMO's own law firm financial services division.

Citibank's Law Firm Group has provided a full menu of financial and wealth management services to lawyers and law firms around the world since 1973, according to the company website.

On Oct. 3 BMO announced the hirings of both Mitchell, the former managing director of Citibank's Law Firm Group, and Benjamin Carr, the former senior vice president for the same Citibank department, as private wealth advisors for BMO's own "expanded" Law Firm Group.

Once their terminations took effect, Citibank claims that Mitchell and Carr "likely" began using "confidential and proprietary information relating to the cash positions and products held by Citi clients" to recruit law firms and lawyers to move their assets to BMO, citing a Nov. 4 email Mitchell allegedly sent to a BMO client. Citibank N.A. et al. v. Mitchell et al., 3:24-cv-08224 (N.D. Cal., filed Nov. 20, 2024).

In a copy of an employment contract attached to the complaint, Citibank bars former employees from "soliciting" customers for at least one year after leaving.

Citibank wants a temporary restraining order to compel Mitchell, Carr and BMO to "to return to Citi or its counsel all records, documents and/or information."

Mitchell and Carr's attorney, Tracey Salmon-Smith of Faegre Drinker Biddle & Reath LLP, did not respond to requests for comment Friday.

Scott Doll, senior manager for BMO's U.S. media relations, reacted to Citibank's claims in an email Friday. "We deny these allegations and look forward to presenting the facts of this matter. As this matter is before the courts, we have no further comment at this time," Doll wrote.

In a sworn statement given to Leonard Weintraub of Paduano & Weintraub LLP, one of Citibank's attorneys, Mitchell denied soliciting employees and asserted that he did not possess any of Citibank's documents, records, or devices implicated in the bank's accusations. This statement was provided prior to his departure and during Citibank's investigation.

"After making my best efforts to locate any and all documents of any kind or nature whatsoever concerning Citi's clients and employees whether furnished by Citi or obtained or prepared by me while associated with Citi," Mitchell wrote. "To the best of my knowledge and belief I no longer have in my possession, custody or control any such documents or any documents derived therefrom. I have also returned all software provided to me by Citi and all back-up copies and diskettes. I have not solicited or encouraged any Citi employees to leave Citi or to seek employment with BMO, nor have I assisted BMO in recruiting any Citi employees, or provided any information about any Citi employees to BMO."

In its complaint, Citibank's legal team outlined the alleged misappropriation of trade secrets following the defendants' transition to BMO. The filing highlighted a specific incident involving a Nov. 4 email that Mitchell allegedly sent to a Citibank customer "on the exact day that the client's multi-million-dollar certificate of deposit at Citi matured."

"There is no way that Defendants could be aware of the client's cash balances and the maturity dates of the CD without taking or retaining such confidential and proprietary information from Citi upon their departure," the attorneys wrote. "It strains credulity to believe that it is simply a coincidence that Mitchell sent the Citi client this email comparing BMO CD rates to Citi CD rates on the exact date that the client's CD matured and was set to renew without the use of Citi confidential and proprietary information, which he is not permitted to use or retain after his employment ended."

The following attorneys are Weintraub's co-counsel in the case: Stacy Lynne Fode, Natalie P. Bryans, and Jennifer Casazza Carter of Nukk-Freeman & Cerra PC.

According to a declaration from Michael D. Remak, a managing director and the head of investments for Citibank's "Global Wealth at Work" division, Mitchell and Carr oversaw a combined $649 million dollars in assets from more than 1,000 law firms worldwide. Remak's declaration was attached to Citibank's TRO motion.

"At the time of his resignation, Mitchell was responsible for overseeing approximately 450 law firms and their partners/associates at Citi, with a total of approximately $497 million in assets," Remak wrote. "At the time of his resignation, Carr serviced approximately 570 law firms and their partners/associates at Citi, with a total of approximately $152 million in assets. All of these relationships formerly serviced by Carr were assigned by Citi's Law Firm Group to him to service."