Bank Sues Founders of Precedent Wealth

Posted on June 3rd, 2024 at 4:08 PM
Bank Sues Founders of Precedent Wealth

From the desk of Jim Eccleston at Eccleston Law

Cadence Bank has filed a lawsuit against the founders of Precedent Wealth, a San Antonio RIA, accusing them of stealing confidential information and trade secrets in an effort to poach clients from their former firm.

According to WealthManagement, the lawsuit targets brothers Harold and George Williams, who departed from Linscomb & Williams, which was acquired by Cadence Bank in 2012. The Williams brothers, who had been with Linscomb & Williams for five decades, are accused of violating the national Defend Trade Secrets Act, Texas Uniform Trade Secrets Act, and their contractual and fiduciary obligations.

Among the allegations, Cadence Bank claims that the Williams brothers failed to provide proper notice before resigning, leading to chaos and confusion, and that they contacted clients both before and after leaving, using a proprietary file containing personal information of 275 clients. This file, according to the plaintiffs, was accessed and retained improperly.

Additionally, the lawsuit alleges that the Williams brothers misappropriated trade secrets related to portfolio modeling, performance, operations, asset management strategies, and financial information. Cadence Bank asserts that the Williams brothers were paid substantial sums for these trade secrets, developed during their tenure at Linscomb & Williams.

Cadence Bank states that it has received notices of at least 80 client transfers to Precedent Wealth from its RIA, which rebranded as Linscomb Wealth in January. The bank claims a loss of over $350 million in AUM to date, all of which has allegedly transferred to Precedent Wealth.

WealthManagement also reports that Precedent Wealth was launched on the Dynasty platform on April 26, 2023, just twelve days after the Williams brothers officially resigned from Linscomb & Williams. The firm introduced a profit-sharing program named "WillShare," aiming to set a new industry standard.

 

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.

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