United Capital Revives Lawsuit Against Osaic
From the desk of Jim Eccleston at Eccleston Law
According to AdvisorHub, United Capital Financial Advisors has revived its lawsuit against independent broker-dealer Osaic by filing an amended complaint that reframes the dispute around the alleged misuse of confidential information obtained during Osaic's unsuccessful effort to acquire the firm.
The amended complaint follows Judge Sheldon Rennie's June dismissal of United Capital's original complaint. As AdvisorHub reports, Judge Rennie found that many of the original allegations relied too heavily on claims made "upon information and belief" and did not provide enough factual support for the court to evaluate them.
United Capital's amended complaint focuses on information that Osaic allegedly received during the due diligence process when it sought to acquire the business from Goldman Sachs. Creative Planning ultimately acquired United Capital in 2023.
According to AdvisorHub, United Capital alleges that Osaic received confidential documents containing information about office-level financial performance, advisor compensation, and employment agreements. Those agreements detailed advisors' non-compete, non-solicitation, and confidentiality obligations.
United Capital claims that Osaic later used the information it obtained as a prospective buyer to identify and recruit key employees after learning that it had lost the acquisition.
The dispute centers on United Capital's Fort Lauderdale office, which Neal Slafsky led. According to AdvisorHub, the amended complaint alleges that Osaic shifted its attention to recruiting Slafsky and the Fort Lauderdale team after it lost the bid for United Capital. United Capital claims that Slafsky and six other employees helped orchestrate the transfer of clients and confidential information.
United Capital also alleges that Slafsky and two other advisors had contractual obligations to provide at least 90 days' notice before resigning. Their agreements also restricted them from competing with United Capital or soliciting its clients and employees for six months after their notice dates. The agreements further required them to maintain the confidentiality of client and business information.
As AdvisorHub reports, the amended complaint alleges that Osaic specifically requested copies of advisor employment agreements, asked Goldman to explain the non-compete and non-solicitation provisions, and participated in discussions involving advisor compensation and office leadership. United Capital contends that this due diligence process gave Osaic knowledge of the contractual restrictions that later became central to the dispute.
The amended complaint further alleges that Goldman warned Slafsky that attending additional meetings with Osaic would violate his employment agreements. According to AdvisorHub, United Capital also claims that Goldman notified Osaic that it was improperly soliciting employees subject to restrictive covenants and violating the confidentiality agreement governing the acquisition process.
United Capital continues to seek damages related to the departures. As AdvisorHub reports, the firm alleges that clients representing approximately $237 million in assets under management ultimately transferred their business to Osaic.
Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.
Tags: eccleston, eccleston law, securities litigation, broker-dealer disputes, misuse of confidential information, m&a litigation, wealth management law
