Former Joint Producers Sue Each Other
Former Joint Producers Sue Each Otherhttp://www.brokeandbroker.com/index.php?a=blog&id=591
In a FINRA Arbitration Statement of Claim filed in May 2009, Claimant Robert Brink alleged that he and Respondent Jessica Cutrera had agreed to jointly develop clients. In furtherance of that joint production, Brink and Cutrera had agreed to split the resulting commissions from mutual funds, variable annuities, and recurring fees derived from Registered Investment Advisory service to their clients.
Sadly, it does not appear that this partnership progressed smoothly.
Claimant Brink alleged, in part, causes of action againstRespondent Cutrera for breaches of fiduciary duty and contract, and fraud; and Respondent BFT Financial Group LLC. for aiding and abetting; interference with contractual relations; breach of fiduciary duty; and failure to supervise.
Brink sought $1 million in compensatory damages plus interest, attorneys’ fee, and costs. In the Matter of the Arbitration Between Robert F. Brink, Claimant, versus BFT Financial Group, LLC and Jessica Carolyn Cutrera, Respondents. (FINRA Arbitration 09-02486, October 11, 2010).
Respondents Cutrera and BFT generally denied the allegations and asserted various affirmative defenses. Cutrera went a step further and filed her own Counterclaim against Brink -- ultimately seeking damages of $31, 301.12 plus interest, costs, and fees.
READ THE OUTCOME OF THIS CASE AT:
Financial advisors have a very bad habit of not formally entering a business agreement when creating partnerships. I've been guilty of this twice before. I learned from that, and ever since, have put everything in writing and utilized an attorney.
Even a wirehouse rep early in his career, should at the very least have something typed up, and then witnessed. That should cover old clients, new clients, sickness/death, termination, resignation, moving to other firms, production requirements, and some sort of amicable separation agreement.
50% of partnerships come to an end, so you have the math working very much in favor of needing something formal. The firm, if there is a corporate employer, isn't going to make you do this, because without an agreement, they can play along with whatever is in THEIR best interests.