Hightower Drops Claims Against Former Advisor Amid Non-Compete Dispute

Posted on November 20th, 2024 at 3:58 PM
Hightower Drops Claims Against Former Advisor Amid Non-Compete Dispute

Hightower, a Chicago-based RIA firm, recently dropped its lawsuit against former advisor Lars Knudsen just days before a federal judge in Illinois was set to rule on the firm’s injunction request. According to WealthManagement, Hightower sued Knudsen in March, alleging that Knudsen violated non-compete agreements following his termination. The firm claimed his dismissal was due to policy breaches, including allegedly bringing a firearm into the office. Knudsen countersued in Washington, accusing Hightower of coercing advisors into restrictive contracts and misrepresenting his professional conduct.

Knudsen, who led Triad Wealth Management before joining Hightower in 2014, argued that the firm pushed him out to secure his clients’ assets, fostering what he described as a “toxic corporate culture.” He contended that the company’s leadership and recently added advisors sought to reshape the culture of his Belleview office, pressuring him to retire and allegedly making derogatory remarks to clients to facilitate his exit. Knudsen's attorney characterized Hightower's actions as a “disinformation campaign” against him.

Hightower, however, asserted that Knudsen misappropriated firm earnings and directed over $225,000 in client fees for personal use. The firm also alleged that Knudsen repeatedly brought a loaded firearm into the office, once placing it on the table during a termination meeting with an employee. Knudsen refuted these allegations, stating that he accidentally brought his firearm to the office once, immediately returned it to his vehicle upon realizing the mistake.

While Hightower has withdrawn its Illinois claims, the firm continues to pursue its case against Knudsen through binding arbitration. Meanwhile, Knudsen has filed a separate lawsuit against four Hightower Bellevue principals, alleging that they diverted firm funds to deny him owed compensation. Hightower has refrained from commenting on the ongoing litigation, stating only that it intends to continue pursuing its claims in arbitration.

 

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

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