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Edelman Financial Engines

Edelman Presses Court to Let Suit Against Mariner Continue

Mariner asked a federal court to pause Edelman Financial Engines' trade-secret lawsuit during an ongoing arbitration process. Edelman says that would only let Mariner continue raiding its advisors and clients "with impunity."

Edelman Financial Engines is urging a Kansas federal court to deny Mariner Wealth Advisors’ request to pause Edelman’s lawsuit against it, arguing that doing so would allow Mariner to “​​continue its unlawful conduct with impunity.”

In the original suit filed Nov. 16, Edelman accused Mariner Wealth of enticing Edelman advisors to join their ranks, stealing trade secrets and breaching confidentiality agreements and non-solicitation clauses in the process. Edelman argued Mariner was stealing “the fruits of Edelman’s multimillion dollar investments in marketing and client goodwill.”

Mariner fired back in December, accusing Edelman of a “nearly three-year campaign to unlawfully stifle fair competition in the investment advisory services industry,” and asked for the court to place a stay on the case while arbitration proceedings against some of the advisors who left Edelman for Mariner continue.

But the stay would “greatly prejudice Edelman” by allowing Mariner to continue poaching clients and trade secrets from Edelman while those arbitrations progressed, which Edelman believes could last longer than the calendar year, the company argued.

“As Mariner continues to solicit Edelman planners to divulge Edelman’s trade secrets and breach their Edelman agreements, Edelman will be forced to choose between enforcing those agreements against breaching former employees, potentially prolonging the stay Mariner seeks in this litigation, and effectively waiving its right to enforce those agreements against breaching former employees so it can pursue this litigation against Mariner,” the Edelman order read.

According to Edelman, Mariner’s “calculated campaign” to hire away Edelman planners and get them to disclose proprietary client information began in the summer of 2021, when Mariner poached Edelman advisor Michael Horne; the move lost Edelman 84 clients and $83 million in assets, the firm argued. Edelman claims the total damage was the loss of ten advisors, with 851 clients and $621 million over the past several years. 

The firm says they became aware of Mariner’s alleged plot to target Edelman advisors and clients in 2023, when that firm “significantly escalated its unlawful conduct,” according to the order. After pursuing arbitration against several of the advisors, Edelman deduced Mariner was not going to stop its push and opted to sue the firm.

Among other things, Mariner claimed that Horne and others provided a copy of his non-solicitation agreement for Mariner, and also allegedly recreated a client list for his new firm, as well as contacting those clients and enticing them to follow him to Mariner. 

But Mariner and Horne filed a suit against Edelman in 2021 against Mariner, arguing Edelman’s agreements with Horne were illegal under state law. Eventually, the case worked its way into arbitration, where it is still pending. 

In the latest suit, Mariner argued that Edelman was already arbitrating against several of the former Edelman employees, and said many of the issues in the new lawsuit were also being considered in the arbitrations.

“Mariner is sensitive to the undesirability, in general, of cases being dormant on the Court’s docket while related, previously filed litigation is being pursued,” Mariner’s motion read. “Respectfully, however, that is a situation of Plaintiffs’ making. They did not have to commence this case.”

But Edelman is arguing the arbitrations and federal lawsuit can and should proceed simultaneously. Edelman noted that there are no pending arbitrations against five of the eight planners discussed in Mariner’s complaint, and that this lawsuit is the only proceeding where Mariner is a party and being accused by Edelman.

“While the arbitrating Departed Planners have raised issues that will likely also be raised by Mariner here —for example, whether Edelman’s restrictive covenant agreements are valid under the relevant law governing each individual agreement — the vast majority of claims, issues and facts to be developed in discovery are simply not present in the pending arbitrations,” Edelman claimed in its motion.

Neither company responded to a request for comment.

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