RCS Capital, Cetera and Lightyear reach settlement over executive poaching

RCS Capital Corp. and its brokerage unit, Cetera Financial Group, have reached a settlement with Lightyear Capital in a dispute over Lightyear's poaching of Cetera's executives ranks. The settlement stipulates that Lightyear and its affiliates will not hire or employ senior management of RCS Capital or its related companies, until September, according to a filing last Thursday as part of RCAP's bankruptcy proceedings in U.S. Bankruptcy Court in Delaware. The settlement, which covers more than 40 senior RCAP and Cetera executives, still needs to be approved by the court. Burdened by debt and the faltering sale of nontraded real estate investment trusts, RCAP entered bankruptcy protection at the end of January. The settlement is in response to RCAP's and Cetera's lawsuit in February that alleged Lightyear was assisting Cetera executives in breaking non-compete agreements as they jumped ship first to Lightyear and then eventually to The Advisor Group. The Advisor Group is a network of four broker-dealers that Lightyear and a Canadian pension fund, the Public Sector Pension Investment Board, announced in January they were acquiring from the giant insurance company, American International Group Inc. That deal has not yet closed. Mason Allen, RCAP's general counsel, declined to comment. A spokesman for Cetera, Joseph Kuo, said that company did not discuss legal issues as a matter of policy. A spokeswoman for Lightyear, Janet Reinhardt, said the firm declined to comment. The proposed settlement also covers two former Cetera executives named in the February complaint, Cynthia Hamel and Susan Theder. Both resigned from Cetera in February to join Lightyear as consultants. Ms. Hamel was senior vice president, strategic operations for Cetera and Ms. Theder was chief marketing officer. Both cannot work with Lightyear to compete with RCAP or Cetera until September 4 or until the RCAP bankruptcy plan is effective.