What You Need to Know
- Matthew Philip Snipes, who had managed $4.75 billion in assets, tried to lure several wealthy clients to his new firm, Vanguard says.
- One client notified Vanguard he's moving $26 million in assets, according to the suit.
- The investment giant says Snipes violated a transition payment agreement.
The Vanguard Group has filed a federal lawsuit alleging that a senior financial advisor who resigned from the company in April actively sought to poach ultra-high-net-worth clients to form a competing firm, in violation of employment agreements and legal obligations.
Vanguard, in a suit filed this month in the U.S. District Court for the Western District of North Carolina, contends that Matthew Philip Snipes, a longtime employee responsible for managing more than $4.75 billion in assets, tried to steal wealthy clients for his new venture, Topsail Wealth Management LLC. The clients he served have generated more than $8 million in annual revenues for Vanguard, according to the complaint.
At least five clients with assets totaling $216 million have told Vanguard they were considering transferring, or had decided to transfer, their accounts to Snipes’ new North Carolina firm, with one customer sending notice that he was switching $26 million in assets to Topsail, according to the complaint filed on June 9.
Snipes visited all these clients in person at Vanguard’s expense while employed with the company this year, then called them following his resignation during what should have been his 60 days’ notice period, Vanguard alleges.
At least three other clients with assets totaling $310 million, whom he visited this year while working for Vanguard, “appear to be at risk of following Snipes to his new firm because they have been reluctant to engage with their new proposed advisors,” the company contends.
Vanguard accuses Snipes of breach of contract, unjust enrichment, misappropriation of confidential information and trade secrets, unfair competition, tortious interference with contractual and business relationships and breach of fiduciary duty of loyalty. The company also makes certain legal claims against Topsail.
Snipes’ attorney, Matthew DeAntonio, declined to comment Wednesday given the ongoing litigation, and Vanguard’s media relations office didn’t respond to an email seeking comment.
In early June, a North Carolina Business Court judge denied Vanguard’s request for a temporary restraining order, after which the Pennsylvania wealth management giant voluntarily dismissed its state complaint and quickly filed a new lawsuit in federal court.
From Entry Level to Senior Advisor
Snipes started working at Vanguard in an entry-level position straight out of college in 2006, with no experience, licensing or client prospects in finance, according to the federal complaint. Vanguard says it devoted “substantial resources” to developing him as a financial advisor and providing growth opportunities over the next 16 years, introducing him to some of its wealthiest clients.
Using these resources, opportunities and client relationships, Snipes rose to Vanguard’s most senior client-facing position, Ultra High Net Worth Senior Financial Advisor, earning hundreds of thousands of dollars a year serving as the main investment manager for wealthy clients, most of whom had invested at least $15 million with Vanguard, the complaint states.