Tr?id=566623520170033&ev=PageView&noscript=1

Salomon & Ludwin Sues Former Employees Despite Being a Protocol Move

Posted on July 15th, 2024 at 10:16 AM
Salomon & Ludwin Sues Former Employees Despite Being a Protocol Move

From the desk of Jim Eccleston at Eccleston Law

According to WealthManagement, a team of advisors has left Salomon & Ludwin (S&L), a registered investment advisor, to establish their own RIA, Founders Grove Wealth Partners, with backing from Dynasty Financial Partners.

S&L filed a lawsuit against the four former employees and Founders Grove, alleging they misappropriated trade secrets to solicit clients and breached their employment agreements. S&L claims the team misused proprietary information and violated non-solicitation agreements.

According to the complaint, the team previously managed $750 million in assets at S&L and has chosen Charles Schwab for custody at Founders Grove. Founders Grove recently joined the Protocol for Broker Recruiting, which allows departing advisors to take certain client information and solicit clients, even if their previous agreements prohibited such actions; S&L is also a Protocol member. Protocol allows for the smooth transfer of certain customer information and permits the solicitation of clients by the departing advisors. However, the litigation occurring despite both firms being Protocol members suggests that there are complexities or disputes that the Protocol alone could not resolve.

As reported by WealthManagement, S&L alleges that the departing team breached their duty of loyalty and employment contracts, taking client information and soliciting clients. The lawsuit also accuses Thompson of deliberately delaying the development and updating of S&L’s training manuals and transition processes to hinder the firm's response to their departure and make it difficult to hire new staff.

This case underscores the legal complexities surrounding the transition of financial advisors notwithstanding the assumption that the move will be according to the Protocol for Broker Recruiting.

 

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
Quotes Bigger

I am grateful to have found an outstanding law firm that specializes in securities matters. My lawyers were extremely knowledgeable, diligent, and are skilled litigators. No stone was left upturned. As a result of their experience and tenacity, the arbitration proceeding was dismissed in my favor.

Michael E.

LATEST NEWS AND ARTICLES

1782744905 Law
June 29, 2026
Former Arvest Wealth Representative Sanctioned by FINRA Over Improper Use of Mistaken Commission Payment

The Financial Industry Regulatory Authority (FINRA) has suspended former Arvest Wealth representative Brandon Still for 18 months and fined him $5,000 after determining that he improperly used firm funds that were mistakenly deposited into his account.

1782497406 Law
June 26, 2026
FINRA Seeks to Make Remote Inspection Program Permanent

The Financial Industry Regulatory Authority (FINRA) is seeking approval from the Securities and Exchange Commission (SEC) to make its pandemic-era remote inspections program permanent before the current pilot is scheduled to expire in June 2027, according to AdvisorHub and FINRA's summary of its recent Board of Governors meeting.

1782400213 Law
June 25, 2026
SEC Alleges Illinois Investment Adviser Misappropriated Investor Funds and Concealed Losses

According to a litigation release published on SEC.gov, the Securities and Exchange Commission (SEC) has charged John Sterling Myers and his firms, Sterling Capital, LLC and Sterling Capital Management, LLC, with orchestrating a multi-year fraud involving investor funds held in a pooled investment vehicle.