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Jun 3, 2009 7:21 pm

thx to all that replied. You have been of great help.

Jun 3, 2009 8:00 pm

If the attorneys you are speaking with say the non compete is not valid then you should be fine. It does appear if he is a rain maker at the current bd then they will side with him in any conflict you have with him. Start looking at other BD but keep it quiet. Offer him NOTHING.

Jun 4, 2009 3:39 am

I’d probably punch the awhole in the face - but I’m not sure that would help you legally or in any other way.  Sorry for the situation.  Make sure your lawyer is good and get movin; but as jb advises - say nothing and pay nothing.

Jun 4, 2009 3:53 am


For the most part I would agree with the attorney, the agreement is invalid.  First he asked you to go, if you had quit that may have changed the situation a little.  As far as the OSJ is concerned, you should look for another BD if you need it.  He is obviously trying to keep some of the revenue and not do much work for it. 

I helped a few of my clients switch all their clients to 100% RIA.  As an independent why deal with double the compliance?  RIA is much easier to manage. 

Good Luck.
Ash - The Breakaway Experts.

Jun 4, 2009 1:09 pm

Thanks for the replies.

  In an effort to keep my first post from being too lengthy, I left out several details. I'm a bit of a skeptic by nature, so I'm not 100% confident about the non-compete being invalid, but since he let me go, allowed me to open my own offic in the same town. Signed over my book to me and has forced me to spend $ on sinage and office equipment, I don't see how the courts could make me shut down. A TRO for the remainder of the 1yr stopping any transfer of his clients would be worst case I'd think. One thing to mention though is that none of the attorneys are securities experts that I have talked to. The main reason on attorney says it is invalid is that the geographical area is not legit? He stopped at that and said it was a joke and he was surprised that the attorney (big name in town) even wasted his time to write it up.   I've looked at several options aside from switching BD, none of which I've acted upon. They include having an attorney who is familiar with securities law write a  letter to him and try to put pressure on him by using his "shady tax practices" against him, but I really don't want to go below the belt. I'm not getting anywhere by being nice though. I also talked to a FINRA ombudsman and she said that this looks like a case that could be resolved by mediation/arbitration. I don't know the details of that yet and I don't know what it would cost. One problem I have with finding another BD is that I don't have personal production #'s since we ran everything through a joint rep #. I have been told by someone to use that # when they want production #'s, but I don't know if that will fly with a prospective BD. By the way ASH, I like the idea of going all RIA, but I handle alot of smaller accounts for people and I just don't want to tell them to go elsewhere. I was thinking anything around 25K could go advisory, but smaller college accounts and such would have to stay commision based? . You have to remember I'm in a small town with a rather rural blue collar demographic.
Jun 4, 2009 1:35 pm

I do not think you need to worry about a TRO… he has done everything to let you go and even helped you to move clients.  All his actions go against his agreement. I would let him spend his money to try to stop you first.  When he goes to an attorney, his attorney will probably tell him he has no case.   That is unless he lies to his attorney.

As far as the RIA is concerned, the advisors I helped structured their ADV and Agreement to have a “consulting fee” or a flat fee based on the project.  So these advisors were able to charge a fee for their transaction business.  I do need to add, their transaction business is minimal relative to their advisory business when looking a revenue. 

If you need an securities attorney or a BD to speak to, send me a PM and I can give you a person. 

Good Luck. 

Jun 10, 2009 2:21 pm


point well taken. thx for the headsup.