The rise of the Protocol has significantly reduced the legal rancor over so-called breakaway brokers--those who depart their brokerage firms for greener pastures at other firms. The deal was struck in 2004 by UBS, Citigroup and Merrill Lynch. It slowly gathered steam and today can boast more than 470 signatories. The goal was to impose some order on the rough-and-tumble process by which brokers and advisors change hands.

So, why did Bank of America sue Dynasty Financial when a top team at U.S. Trust (owned by Bank of America) decided to leave and join the acclaimed start-up? U.S. Trust and parent Bank of America are not signatories to the Protocol, though Merrill Lynch is, notes RIABiz.

"Late last year, Bank of America explicitly carved out advisers working for U.S. Trust, Bank of America Private Wealth Management by sending a letter to all Protocol signatories, saying that those employees were not covered by the Protocol. Merrill Lynch advisors are still covered by the Protocol, the company said, but not wealth management bankers working for Merrill."

So, Bank of America looks to be playing hardball. It would be interesting to see what the settlement spelled out exactly. It would have been an interesting trial.

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