It may not surprise many in the financial advisor industry that a senior advisor is departing problem-plagued Wells Fargo to create an independent firm. But Nico March, managing director of The March Group in San Diego, has launched a preemptive strike in the wake of his departure by filing a lawsuit against Wells Fargo to prevent the financial services giant from preventing him from soliciting his clients.
March filed the lawsuit in federal court on December 10. That is the same day he transferred his Finra registration to LPL Financial, according to his record on BrokerCheck.
Wells Fargo “is not entitled to a temporary restraining order, preliminary injunction, permanent injunction or other injunctive or monetary relief against Plaintiff related to his transition to a new firm, his announcement to his clients of his new affiliation, and his solicitation of clients to move their accounts to his new firm,” according to March’s complaint, filed in U.S. District Court for the Southern District of California.
“Wells Fargo has lost hundreds, if not thousands, of financial advisors following the seemingly unending parade of scandals plaguing the firm,” according to the complaint filed by his attorneys at Shustak Reynolds & Partners. “This has caused Wells Fargo to become increasingly hostile in its treatment of departing advisors, including advisors who leave pursuant to the terms of the Broker Protocol.”
Neither March nor Shustak Reynolds & Partners returned requests for comment.
March’s complaint seeks a temporary injunction absolving him of violating “trade secret” protection laws and his employment agreements. These are arguments broker-dealers typically cite when seeking to stop departing brokers from taking their clients with them in the early days of setting up their new practices, as well as a declaratory judgment. Some details of the lawsuit were reported by AdvisorHub.
The attorneys cite a lawsuit Wells Fargo Advisors (WFA) filed in August seeking a restraining order against two departing brokers with over $300 million in assets who departed to join RBC Capital Markets.
In that complaint, Wells, which unlike competitors such as Morgan Stanley and Merrill Lynch does not have a sustained history of litigating against fleeing brokers, asked a federal judge to prohibit the brokers from calling their former clients, according to a complaint filed in the U.S. District Court for the Middle District of Florida in August.
The Sarasota-based brokers, who oversaw $306 million in client assets, allegedly violated both their employment agreements and succession agreements governing accounts they picked up from retiring Wells advisors, the Wells complaint alleges.
They also solicited WFA clients while still employed by WFA, the complaint alleges.