Edelman Financial Engina has filed a lawsuit in a district court in Texas against a former adviser, claiming he violated the confidentiality of the counselor and the non-seeking agreements when he moved further in January.
Advisor John Carey began at the Mutual Fund Shop, an EDELMAN's predecessor, in 2005, according to regulatory registrations. Financial engines, who later joined Edelman, won the Mutual Fund Shop in 2015.
As part of his employment, Carey signed the confidentiality agreements of the councilors and non-seeking, saying he could not seek clients for a year after his employment with the firm ended, the lawsuit claims. The agreement also demanded that it keep Edelman's trade secrets confidential, including customer lists, investment positions and tariff structure.
Since January, Carey has served 260 clients in more than $ 112 million, almost all were created through Edelman's marketing efforts, the firm claims.
The complaint says Carey resigned from Edelman on January 17 without prior notice and was transferred further away.
Now Edelman is looking for damage, claiming he has received 55 clients and over $ 55 million in AUM so far as a result of contractual violations. “He immediately joined and continued to violate his contractual obligations, including illegally demanding and accepting business from Edelman customers he had served,” the complaint said.
The lawsuit also claims that he misused trade secrets using confidential clients and the firm owner's lists after he resigned. He also claims to violate the task of confidence in confidentiality and loyalty using its client lists, investment positions and tariff structure to remove customers from Edelman.
Carey did not return a request that required comment before publication.
“We are committed to maintaining the confidential information of our company and our clients,” said a spokesman for Edelman in a statement. “We filed this complaint to address the actions of the defendant and to ensure that we protect our business and the confidence that our customers decide on us.”