In a financial advisor versus financial advisor face off, a fight in Seattle over control of and access to clients came to a head last week when a FINRA Dispute Resolution Services arbitration panel ordered one former colleague to pay another $450,000.
The twist? The advisor, Erin Cannell, who in 2022 sued his former colleagues wound up on the losing end of the three-person panels’ decision, according to the award, which was made public last Monday.
Cannell, a veteran Ameriprise advisor, was ordered to pay $150,000 in damages and $300,000 in legal fees to another advisor, Andre Selfa, who left Ameriprise in 2021 and jumped to independent broker-dealer Securities America Inc., which is now Osaic Wealth Inc.
According to the arbitration award, Selfa and another advisor sued by Cannell, Austin Scott, were employed by Cannell’s firm, Heritage Wealth Advisors.
The dispute among the advisors was centered on access and control of clients, according to the award.
“I’m seeing more disputes like this between advisors and other advisors at the same practice,” said Sander Ressler, managing director of Essential Edge Compliance Outsourcing Services. “What happens is not only do financial advisors leave but in some instances they may take proprietary information with them, and that could be investment models, research or proprietary algorithms.”
“A firm has those things to make a difference with clients,” Ressler said. “It’s the secret sauce. These advisors versus advisors claims are not just about clients. They’re also about information.”
According to the FINRA arbitration award, Cannell alleged breach of contract, misappropriation of trade secrets and other claims against Selfa and Scott.
“The causes of action relate to the resignation of employment by Selfa and Scott,” according to the award.
The two advisors denied those claims, according to the award.
In a more favorable outcome for Cannell and his firm, Heritage Wealth, also a claimant in the lawsuit, the other advisor, Scott, who left Ameriprise in 2022, was hit with an injunction in state court and was not part of the arbitration panel’s final ruling last week.
“My client is disappointed in the result against former employee Andre Selfa but is pleased with obtaining a (temporary restraining order) against and receiving a settlement from Andre’s business associate Austin Scott,” Cannell’s attorney, Brandon Taaffe, wrote in an email to InvestmentNews.
An attorney for Selfa, Jaimie Fender, did not return a call Monday to comment.
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