The executives behind Oranj and TradeWarrior are looking to move on from a litigious breakup following Oranj's
majority-share acquisition of the rebalancing software in April 2017.
One year after the deal, TradeWarrior founder and former CEO Damon Deru
sued Oranj and its CEO David Lyon, claiming Mr. Lyon knowingly exaggerated Oranj's number of clients, revenue and product functionality. Mr. Deru also alleged he was shut out of business discussions and was improperly fired in December 2017.
Mr. Lyon
filed a countersuit against Mr. Deru and three other TradeWarrior employees, claiming Mr. Deru withheld material information about TradeWarrior's operations and liabilities, including Securities and Exchange Commission findings that the company engaged in securities fraud. The lawsuit alleges Mr. Deru was terminated for "unauthorized business activities," and that TradeWarrior responded by destroying or hiding computers and code.
"It was not a good fit, not a good partnership," Mr. Deru said when asked about his departure from the company he created in 2008. He did not respond to additional questions about the lawsuits.
In a prepared, written statement, Mr. Lyon said, "Although our business relationship did not work out, we amicably resolved our disputes in a way that is best for both companies and we wish Damon and his team all the best."
Now the battle appears to be moving from the courtroom to the marketplace.
Mr. Deru is joining forces with Pete Giza, the vice president of business development at Wealthsite and co-founder and former chief technology officer of RedBlack, to launch AdvisorPeak, a new portfolio trading and rebalancing software the two fintech veterans believe can find footing in an already crowded market.
While existing trading and rebalancing software was revolutionary when introduced, the market has grown stagnant. Mr. Deru and Mr. Giza say they have an aggressive roadmap to bring something new to advisers.
"Nothing has really progressed that much," Mr. Giza told
InvestmentNews. "There are a ton of people claiming rebalancing capabilities. They are like a Ferrari body with a Volkswagen engine in it."
Joining them are several former TradeWarrior management and staffers, notably head of engineering Darren Collins and vice president of client relationships Patrick Keel, who were both named in the countersuit.
Mr. Deru said AdvisorPeak is on track for a 40% to 50% growth rate, starting with reacquiring several clients from TradeWarrior.
Pinnacle Advisory Group partner and director of planning research Michael Kitces
said on his blog that despite there already being a number of rebalancing software options available, adoption among advisers is relatively low.
"Which means there's still plenty of room for 'new' providers like AdvisorPeak to grow – especially given that rebalancing software is arguably one of the most time- and cost-saving software solutions there are for advisory firms managing client portfolios," Mr. Kitces said.
As for Oranj, Mr. Lyon said TradeWarrior is still an important part of building the company's next-generation adviser platform.
"Our team of developers led by our CTO, head of engineering and head of product has delivered more than 40 years of institutional trading experience to help build upon and expand TradeWarrior's legacy, making it a competitive player in the industry," Mr. Lyon said.
