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Regulation and Compliance > Litigation

TIAA Sues Ex-Advisors for Allegedly Soliciting Clients

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What You Need to Know

  • Three former TIAA advisors allegedly solicited clients to follow them to their new firm, Tidewater Wealth Management.
  • The alleged solicitation happened while they were still with TIAA, according to a complaint filed Monday.
  • TIAA is seeking injunctive relief, compensatory and/or liquidated damages, punitive damages, and legal and other fees and costs.

Teachers Insurance and Annuity Association of America (TIAA) sued three of its former Connecticut wealth management advisors on Monday for allegedly soliciting TIAA clients to follow them to their new firm, in violation of their employment agreements.

In a complaint filed in U.S. District Court for the District of Connecticut, TIAA alleged that David Wheatley of Easton, Timothy O’Shea of Watertown and William McDonald of West Hartford were guilty of breach of contract, breach of their duty to loyalty, and unfair competition for intending to solicit or having solicited TIAA clients to follow them to Tidewater Wealth Management.

The three advisors did not immediately respond to a request for comment on Tuesday.

They started Tidewater, with offices in New Haven and West Hartford, earlier this month and serve as its senior wealth management advisors, according to its website.

Wheatley and O’Shea had each worked at TIAA’s Hamden office, while McDonald had worked in TIAA’s Hartford office. Wheatley, O’Shea and McDonald had been with TIAA since 2013, 2007 and 2015, respectively, according to the complaint.

TIAA is seeking preliminary and permanent injunctive relief, compensatory and/or liquidated damages in an amount to be determined at trial, attorneys’ fees and other costs, and unspecified punitive damages.

Wheatley, O’Shea and McDonald had access to and managed clients with over $870 million, $915 million and $660 million, respectively, for a total of over $2 billion in assets with TIAA, the complaint said. The clients to which each defendant had access and managed “generate substantially in excess of $75,000 in annual revenues,” according to TIAA.

In connection with their ongoing affiliation with TIAA, the defendants each signed an agreement containing notice, nonsolicitation, confidentiality and nondisparagement covenants, according to the complaint. The agreement prohibited the advisors from interfering with TIAA’s client relationships and required them to provide 30 days’ written notice of intent to resign and end their employment with the firm, TIAA said.

The advisors gave notice of their resignations from the firm on Sept. 3 and, “upon information and belief, prior to giving notice, [they] contacted certain of TIAA’s clients about moving to Defendants’ new venture,” the complaint alleged. The defendants remained TIAA employees through and including Oct. 3, according to TIAA.

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Before giving notice of his resignation, Wheatley told a TIAA client he was leaving the firm and “words to the effect that there was a ‘mass exodus of Yale advisors from TIAA,’” the complaint alleged.

With the exception of Wheatley and O’Shea, however, the only other two TIAA wealth management advisors aligned with Yale University to leave the company had availed themselves of TIAA’s voluntary separation program almost a year earlier, in late 2020, according to the complaint.

Wheatley also told the same TIAA client before giving notice of his resignation and, “while still on the company’s payroll, that the client would not be able to get any support” from TIAA’s Hamden office, the complaint alleged.

Another client Wheatley formerly served at the firm recently advised TIAA that, before giving notice of his resignation, Wheatley was “very negative about TIAA, told her all the things he felt were ‘wrong’ with the company, and proceeded to detail all the reasons why he would be leaving TIAA,” according to the complaint.

Similar communication was made with other TIAA clients and appointments were set up with clients to discuss their accounts before the advisors left the firm, the complaint alleged.

Effective Oct. 4, the advisors became affiliated with Tidewater and “have failed to provide adequate assurances they will not solicit TIAA clients,” according to the complaint.

On Oct. 12, a client advised TIAA he received a call from O’Shea asking that he move funds from TIAA to Tidewater, the complaint alleged.

(Photo: Shutterstock)