Mariner Wealth Advisors CEO Marty Bicknell admitted last year that the firm “conspired” with a competitor not to hire or solicit each other's employees, according to a copy of a non-prosecution agreement with the Justice Department's Antitrust Division of the USA.
A new lawsuit filed by several former employees alleged that the deal helped Mariner avoid criminal charges stemming from the alleged scheme.
Jakob Tobler and Michelle McNitt filed the lawsuit in federal court in Kansas last week. It names Mariner and several of its current and former subsidiaries and American Century Investments, the firm with which Mariner's top executives allegedly conspired.
According to their lawsuit, Mariner and American Century clandestinely agreed to “restrict, suppress and eliminate their competition in the recruitment and employment” of asset and wealth management employees.
“(Mariner and American Century) entered into this agreement for one clear and overarching reason — so that they could pay these highly qualified employees less than they would be paid in a competitive market,” the complaint states. of Tobler and McNitt.
Tobler and McNitt previously worked for Tortoise, a former Mariner subsidiary specializing in institutional asset management, which Mariner sold in 2017.
Their lawsuit names multiple defendants, including Mariner Wealth and Mariner Holdings, Tortoise and Montage Investments, an affiliate of Mariner's investment management that helped manage the firm's institutional assets until it exited that space. in 2018. according to S&P Global Intelligence.
The suit is intended to be a class action, representing all Mariner employees affected by the alleged scheme.
In the lawsuit, Tobler and McNitt alleged that the Justice Department allegedly began investigating Mariner for antitrust violations before 2023. Mariner entered into a non-prosecution agreement with the DOJ on May 15, 2023, to avoid charges (plaintiffs filed a copy of NPA together with their complaint).
In the NPA, Mariner admitted that between March 2014 and 2018, some of its employees, including an unnamed “high-level executive,” conspired to suppress competition between the firm and American Century by agreeing not to hire or pursue employee in the opposing firm. .
In doing so, Mariner “reduced employee mobility” between firms and “limited employees' opportunities to negotiate for better compensation, benefits and other terms of employment through a move to the Labor Market Competitor,” the NPA read.
Mariner representatives did not respond to a request for comment.
The DOJ justified the settlement based on Mariner/Montage's admission of misconduct and lack of prior, similar misconduct, as well as the firm's cooperation with the Antitrust Division and willingness to settle liability.
As part of the DOJ settlement, Mariner agreed to implement an antitrust compliance program and set aside $1 million to be “used to compensate current and former employees of Montage and related related entities” for their losses.
Among those who signed the NPA dated May 15 last year were Mariner CEO Martin Bicknell, Mariner board members Cheryl Bicknell and Gary Henson and Mariner General Counsel and Chief Compliance Officer Anne Dorian.
According to Tobler and McNitt's complaint, American Century also struck an NPA with the Justice Department to avoid antitrust charges by agreeing to pay current and former employees $1.5 million. The pair quoted a 2021 news report from KCUR Kansas City, which refers to the DOJ letter setting out the agreement. According to KCURThe DOJ did not name the American Century associate in that letter.
The consequences of Mariner's and American Century's conspiracy to artificially depress wages extended beyond employee earnings, Tobler and McNitt alleged. With employers contributing a certain percentage of an employee's salary to retirement plans, an artificially low salary can affect that employee's retirement savings.
“Thus, upon retirement, the worker is left with significantly less in his or her plan than a worker in a competitive market,” the complaint said. “Consequently, plaintiffs and class members will feel the consequences of defendants' illegal agreements for the rest of their lives.”
The Mariner Estate is involved in several lawsuits filed by rival firms, including Edelman Financial Engines, Avantax and RWA Partners. Although the details vary, all the firms accuse Kansas-based Mariner of encouraging and supporting advisers who join RIAs to break confidentiality and non-solicitation agreements of previous employers.
Edelman's lawsuit alleged that Mariner had launched a “calculated campaign” to lure their business. Last week, a judge denied Mariner's request to halt the lawsuit while Edelman continued in arbitration proceedings with some counsel who dropped out.
In a previous interview with Asset managementBicknell said he has “full confidence” in the firm's strategy and platform as it expands from its current roster of 2,000 advisers.
“We have a goal of growing to 5,000 advisors over the next three years, and we're looking for that talent and will continue to recruit aggressively,” he said. “We've built an advisor attraction model that we're very proud of.”
Diana Britton contributed additional reporting.