The counterclaim gives a different account of the dispute, arguing that when the restrictive covenant was signed in 2012, then-Triad CEO Mark Mettelman promised the principals that the covenant would not be enforced. ACG’s claim states that if Mettelman had not made the promise, it would never have signed the promissory note.
Later, in the spring of 2014, ACG received permission from Triad to form an investment fund and hired a full-time employee to set up and run the fund. At the time, Millican had estimated that it would cost ACG $1.1 million to establish the fund.
“(The fund) is important,” Jody Young said via e-mailed comments. “The high-net-worth clients served by ACG Wealth want access to alternative investments and private equity in addition to traditional stocks and bonds, especially in today’s marketplace. They typically do not want off-the-shelf, one-size-fits-all investment opportunities.”
With Triad’s approval in place, ACG says that it proceeded to form the fund until asked to halt the process in the fall of 2015. At that time, the fund was in place but no client assets had been invested and thus revenue had not yet been generated.
According to ACG, Triad’s parent company, Ladenburg Thalmann, had instructed Triad not to allow ACG client money to flow into the fund, thus it was unable to recoup the $1.1 million it had spent to start the fund—raising the question of whether ACG’s dispute is with Triad Advisors or Ladenburg Thalmann.
Over the next year from autumn 2015 to autumn 2016, ACG alleges that it not only informed Triad on several occasions that it would need to disassociate from the broker-dealer to operate the fund and recoup its losses, but that Mettelman and other Triad representatives agreed to allow ACG to leave with “no resistance” and that the “transition would be smooth.”
In the summer of 2016, Millican, Shaver and Young formed their own broker-dealer, MSY. At this time, ACG alleges that the three once more obtained permission to transfer their assets from Triad to the newly formed entity.
“They left us with no choice but to create our own broker-dealer, which has cost us time, energy and money,” said Young. “At the end of the day, though, we’ll finally be able to offer a platform that will better serve our clients and our advisors.”
An Aug. 3 letter from Triad stated that Atlanta Capital had repaid its promissory note, but reiterated that a restrictive covenant remained in place for the five-year period beginning on May 31, 2016. But it did not state whether or not Triad intended to enforce the covenant.
ACG’s counterclaim alleges that Millican, who resigned from Triad on Oct. 3, was not informed of Triad’s intent to enforce the covenant and revoke consent for ACG to leave the broker-dealer until the original claim was filed on Oct. 21.