Financial Service Firms Engage in Raiding Suit

Posted on August 13th, 2015 at 2:08 PM
Financial Service Firms Engage in Raiding Suit

From the Desk of Jim Eccleston at Eccleston Law LLC: 

MetLife Inc. and LPL Financial, two large financial services firms, have entered a heated dispute over the poaching of 60 brokers. In an unresolved claim from May, MetLife claims LPL poached the large amount of brokers since October 2014. The actions allegedly have done irreparable harm to MetLife.

In the claim, MetLife states that LPL “shows no signs of stopping.” While MetLife did not specify the damages it seeks, the company did ask for LPL to be enjoined from soliciting more MetLife employees or customers.

For a successful raiding claim, a firm normally must take at least a third of an office’s revenue and have harmful intent. LPL employed six of MetLife’s top-producing brokers, a group who collectively managed about 490 million in assets. In its defense, LPL is expected to use the “lifeboat defense.” That means that reps were going to jump ship anyway, so the company simply gave them a place to land.

In recent years, MetLife made policy changes that purportedly upset employees. The company switched the employment status of brokers from employees to independent contractors. That caused a lower payout and reduced benefits for brokers.

Additionally, MetLife is changing clearing firms and is moving to Fidelity’s National Financial Services. That change made it a good time for brokers to switch firms because clients already would be transitioning to a new platform.

MetLife reportedly has shed thousands of brokers in recent years due to company shake-ups and falls in variable annuity sales.

The attorneys of Eccleston Law LLC represent investors and advisers nationwide in securities and employment matters. Our attorneys draw on a combined experience of nearly 65 years in delivering the highest quality legal services.

Related Attorneys: James J. Eccleston

Tags: James Eccleston, Eccleston Law Offices, LPL Financial, MetLife

Return to Archive

TESTIMONIALS

Previous
Next

If the regulators are after you, and are trying to make a case against you, and you are going to contest their allegations against you, make sure you have the best securities industry defense lawyers, Eccleston Law Firm. My case was spun into a combination of penalties including fines, cash settlements, CE courses and suspension. They were the best I have seen in action. When all was said and done, they had done their magic, my situation was negotiated and settled with a simple "letter of caution" and a case closed without action. It is the most important legal business decision you will ever make, make it Eccleston Law.

Rick R.

LATEST NEWS AND ARTICLES

September 21, 2023
SEC Charges Private Equity Firm Over Fee Disclosure Failures to Affiliate

The Securities and Exchange Commission (SEC) has charged Prime Group Holdings LLC, a private equity firm specializing in alternative real estate asset investments, with
inadequate disclosure of millions of dollars in real estate brokerage fees paid to a brokerage firm owned by its CEO.

September 20, 2023
SEC Orders Legendary Capital Founder and REIT Advisors to Pay Nearly $5 Million

Corey Maple, co-founder of non-traded REIT sponsor Legendary Capital, has agreed to a $100,000 civil penalty to settle charges brought by the Securities and Exchange Commission (SEC).

September 19, 2023
Reg BI Violations Lead to FINRA's Fine on Another Broker-Dealer

The Financial Industry Regulatory Authority (FINRA) has fined and censured broker-dealer Network 1 Financial Securities and its chief compliance officer for violating Regulation Best Interest (Reg BI).