What You Need to Know
- LPL has been sued for breach of contract by a formerly affiliated broker whom it booted last year over allegations of racism.
- The complaint was filed this week in U.S. District Court for the Eastern District of Texas.
- The plaintiff is seeking $95 million in damages, plus legal fees.
A financial advisor whose affiliation with LPL Financial ended last year over allegations of the advisor’s racist hiring practices is suing the broker-dealer, accusing it of a breach of contract.
Due to LPL’s “wrongful acts,” Eileen Cure — now an advisor with RIA Wealth Management of Kentucky — has been able to “retain only a small fraction of her book of business, representing a loss” of $45 million to $50 million, according to the complaint filed Thursday in U.S. District Court for the Eastern District of Texas in Beaumont.
Cure is requesting $10 million for damage to her reputation in the financial industry, $20 million for loss of income incurred as a direct result of LPL’s actions to date and in the future, $50 million for loss of income associated with LPL’s tortious interference and $15 million in damages associated with professional defamation.
In the suit, she is also seeking unspecified, “reasonable and necessary” attorneys’ fees and costs, as well as pre- and post-judgment interest.
A year ago, LPL said it was “deeply concerned by the statements attributed to” Cure after videos posted on TikTok and shared across social media sites alleged that she told her staff she didn’t want to interview Black applicants for an open position at her office.
The broker-dealer didn’t immediately respond to a request for comment about the matter Friday.
In her complaint, Cure accuses LPL of breaching its contract with her by “not following the explicit terms of the contract [and] its failure to treat the plaintiff’s separate hiring in her accounting business as her own, separate issue” — unrelated to her advisory business — and for treating her as an employee instead of as an independent contractor.
LPL also “failed to provide 30-day notice consistent with terms and conditions found in the contract [that] would have permitted [her] to protect and place her book of business,” the complaint, which was filed Thursday, alleged.
In addition, the firm is guilty of “breach of its fiduciary duty” to Cure as custodian of her book of business, to return her book of business to her at the conclusion of their relationship” even though she allegedly had those advisory clients before she became a rep for LPL, according to the complaint.
In addition, the complaint accuses LPL of breaching its fiduciary duty to Cure’s clients “by cutting off” their ability to communicate with her “by refusing to allow clients access to their own assets,” the complaint alleged.