Former Steward Advisors Sue Firm as They Depart for LPL

Posted on October 27th, 2023 at 2:29 PM
Former Steward Advisors Sue Firm as They Depart for LPL

From the desk of Jim Eccleston at Eccleston Law 

Experienced brokers have witnessed a significant increase in recruiting offers in recent years. However, a lawsuit filed against Steward Partners Global Advisory last week illustrates the consequences that can arise when these deals, particularly those involving equity, take a negative turn. 

Two Texas advisors who transitioned to LPL Financial admitted in their lawsuit that Steward accused them of underperforming. Consequently, Steward aimed to recover the millions it had initially disbursed to them in cash and company shares when they joined Wells Fargo Advisors in 2020. In their complaint, Rick A. Fuchs and Graham P. Heck are pushing back by alleging that Steward inflated the value of their recruiting deal by providing misleading information about the shares' worth.

According to AdvisorHub, in 2021, the advisors asserted that the shares were valued at just $13.22 per unit, resulting in a collective decrease in the value of their deal by $600,000. Moreover, the advisors alleged that, in January 2022, Steward, facing a "cash crunch" initiated reclaiming a portion of the recruiting bonus from advisory teams.

Under the threat of termination, the advisors repaid $1 million and two-thirds of the shares they had received. They are now pursuing an unspecified amount of damages, claiming that Steward violated federal securities laws.

 

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

Tags: eccleston, eccleston law

Return to Archive

TESTIMONIALS

Previous
Next

I just wanted to say thanks again for preparing and executing my case in such a professional manner. It was a pleasure to watch two professionals take such pride in their work, as well as becoming personally in tune with your client (Me). I would personally recommend you and your firm to anyone.

John O.

LATEST NEWS AND ARTICLES

November 7, 2025
FINRA Suspends Former Wells Fargo Broker Over Unapproved Real Estate Venture

The Financial Industry Regulatory Authority (FINRA) suspended former Wells Fargo broker George J. Cairnes for four months and fined him $25,000 for engaging in unapproved real estate outside business activity, according to a settlement letter issued.

November 6, 2025
Former Ameriprise Broker Ordered to Pay $2.2 Million for Elder Exploitation

A Financial Industry Regulatory Authority (FINRA) arbitration panel has ordered Eric A. Dupre to pay nearly $2.2 million in damages to his former firm and two customers following allegations of theft and elder exploitation.

November 5, 2025
Former Wells Fargo Representative Suspended for Unauthorized Texting and Obstruction

The Financial Industry Regulatory Authority (FINRA) has suspended former Wells Fargo representative Eyan M. Townsend for one year and fined him $10,000 for using personal text messages to conduct business and attempting to obstruct an internal investigation by deleting those communications.