UBS Financial Services is suing four former UBS financial advisors over alleged violations of non-solicitation agreements and misappropriation of confidential information.
According to the lawsuit, filed on Sept. 29 in the U.S. District Court for the Southern District of Florida, Andrew Plum, Thomas Cullen, Kathleen Burke and Taylor Marsh abruptly resigned on Sept. 19 to form Loxahatchee Capital and immediately began soliciting UBS clients, resulting in transfer requests for over $200 million in assets within days.
The four advisors "were the key members of a highly successful financial advisor team" known as the 440 Group based in UBS’ West Palm Beach office, servicing UBS clients with assets of more than $1.4 billion and generating annual revenues for UBS in excess of $9 million, according to the suit.
The team had existed for more than a decade at UBS and had previously included a number of other senior financial advisors. These senior advisors left the industry in the recent past and turned over their client relationships to the four advisors to continue servicing at UBS.
The four advisors inherited clients as Receiving FAs from three former teammates who exited the industry under UBS’ Aspiring Legacy Financial Advisor, or ALFA, program.
"Virtually all of the UBS clients serviced by Defendants (and holding $1.4 billion in assets at UBS) were subject to the non-solicitation restrictions in ALFA Receiving FA Agreements signed by one or more of the Defendants," the complaint states.
The agreements at issue were signed in 2019, 2022 and 2023.
"That means the Legacy FAs were still receiving payments under the 2022 and 2023 ALFA agreements at the time of Defendants’ resignation and were entitled to continue receiving payments through 2027 and 2028 under the 5-year payment period of those agreements," the lawsuit continues. "In short, any breach by Defendants of the non-solicitation covenants in their ALFA Receiving FA Agreements would injure not just UBS but also their former teammates, the Legacy FAs."
The suit contends that the former advisors are "using unfair tactics in their efforts to move business out of UBS."
According to the suit, the team printed more than 1,100 pages of confidential client information before departing, and one defendant admitted to planning the transition for eight months while still employed at UBS.
UBS, the complaint states, began receiving account transfer notices on Monday, Sept. 22, the first business day after the advisors departed.
UBS received 22 account transfer requests on Sept. 23, the second business day after the advisors' resignation, the suit contends, "including for 17 accounts for Defendants’ largest client."
"UBS has continued receiving transfer requests in the ensuing days," the suit states.
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