A person close to Savoy said he did what his employer asked him to do, and ended up as a pawn in a bigger fight between warring firms.
Oppenheimer, like many big firms, has been on both sides of raiding battles. About a dozen such disagreements end in arbitration awards each year, said Alison Jimenez, president of Dynamic Securities Analytics Inc. and senior strategist for RegTelligence. Many more are settled privately between firms.
That’s thanks in part to the Protocol for Broker Recruiting, introduced by three big investment firms about a decade ago to put guardrails on client poaching. More than 1,300 firms have signed on to the protocol, which limits the client information brokers can take with them when they move firms -- name, address, phone number, e-mail address and an account title.
Some firms are rethinking whether the protocol offers enough protection. That’s especially true of banks that provide their in-house advisors with client leads from their own broad databases, and see those clients as belonging to the house, not the broker. Merrill Lynch, while championing the protocol, says it has augmented it in recent years with another policy: It provides in-house leads only to brokers who agree not to take those clients with them if they leave.
“Some in the industry are now trying to chip away at the protocol,” says Jonathan Pollard, an attorney in Ft. Lauderdale, Florida, specializing in employment competition issues.
Small Shop
That makes an interesting test case of Westport, Connecticut-based Euro Pacific, a shop of about 30 brokers that never signed the protocol. Oppenheimer, with more than 1,300 financial advisors, is a signatory.
Savoy, 43, arrived at Euro Pacific in 2008 with no clients, according to the Connecticut complaint.
Euro Pacific’s chief executive Peter Schiff, an investment-book author with frequent media appearances, said most of his firm’s clients are drawn to his investment philosophy.
"Clients come to Euro Pacific to work with me," Schiff said by telephone. "They want some of their money with Peter Schiff. They don’t want to invest with Steve Savoy."
Savoy was overseeing $68 million in assets around April 2015 when he started speaking with Daniel O’Dell, the manager of Oppenheimer’s Saddle Brook office, according to the Finra and court complaints. Savoy was under financial pressure after Euro Pacific changed its pay structure, the broker wrote to O’Dell in an e-mail included in Oppenheimer’s Finra filing.
In an early meeting, O’Dell asked Savoy to provide a list of Euro Pacific clients on a flash drive with account statements for each, according to Euro Pacific’s Finra complaint. Savoy expressed concern that doing so would conflict with confidentiality and nondisclosure agreements he’d signed, it added.
O’Dell told Savoy that Oppenheimer had a process for using confidential client data from a broker’s previous employer and used such information “all the time,” Euro Pacific said.
‘Flap His Wings’
O’Dell predicted that when Schiff learned of Savoy’s move, he would “flap his wings, flail his arms and make noise.” But Oppenheimer could likely settle the matter with a $15,000 or $20,00O payment to Euro Pacific, O’Dell told Savoy, according to Euro Pacific’s Finra complaint.
O’Dell didn’t respond to messages requesting comment, and Oppenheimer declined to make him available. The firm, in its Finra filing, said it asked Savoy for any employment agreements to support his claim that he was under no restrictions. Savoy, who had been a managing director at Euro Pacific, didn’t provide any, it said.
On May 6, while still at Euro Pacific, Savoy downloaded contact and account information on 421 clients onto a flash drive, according to the Finra and court filings. The next day Oppenheimer sent him an offer letter with a $280,000 sign-on bonus, which Savoy signed and returned with the drive, according to the Finra complaint. O’Dell, it added, told Savoy he should resign on the Friday before Memorial Day “so we can get a head start.”
Source Says Broker Ended Up A Pawn Between Warring Firms
September 16, 2015
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I hope FINRA crushes Oppenheimer with a huge fine. Alas, FINRA has no guts or integrity. The Financial Advisor and investment advice community has no room for ethics..............it's all about fees for the brokers and their firms with zero concern for the public consumer. You want proof: how many FAs moved their clients to MoneyMarket in 2008 AFTER their clients asked them to get their money out of the market? I'll bet less than 10%. Why not? No trails in Money Market. Fiduciary obligation and suitability are FINRA-approved words tossed around to fool clients that FAs always act in their best interests. This article proves once more it's about the fees and the bonus. If I was a EuroPacific client I would sue Savoy and Oppenheimer for Identity Theft.