Carnegie Investment Counsel sued over valuation suppression

The former managing partner of Eagle Ridge Investment Management, which Carnegie Investment Counsel acquired last year, has sued the Ohio RIA and its top executives. He alleges they lowballed the value of his stake, while aiming to sell Carnegie to potential buyers on earnings that were nearly double the figure used to value his exit. 

David K. Laidlaw, the former managing partner of Stamford, Connecticut-based Eagle Ridge Investment Management, filed the complaint Aug. 7 in the Cuyahoga County Court of Common Pleas. The defendants are Carnegie Capital Asset Management LLC, which does business as Carnegie Investment Counsel; as well as Carnegie’s CEO Richard Alt and president Gary Wagner. Seven other Carnegie members are also named as defendants, though the suit makes no allegations against them. 

Laidlaw alleges, "upon information and belief," that Alt and Wagner have been marketing Carnegie for sale on estimated EBITA (Earnings Before Interest, Taxes, and Amortization) of about $21.3 million at multiples of 16 to 17 times. This measurement would value Carnegie at around $341 million to $362 million. 

'Suppresion of EBITA' 

However, Laidlaw alleges the defendants used "adjusted EBITA" of about $11.7 million and a 14x multiple in a written valuation of Carnegie. That puts Carnegie’s valuation at about $164 million, roughly $177 million to $198 million less than the implied sales pitch valuation.  

“There is a material dispute about the integrity of the financial statements, the intentional manipulation and/or suppression of EBITA, and valuation metrics applicable to Plaintiffs ownership interest in the Company,” reads the lawsuit from Laidlaw.  

Carnegie Investment Counsel and Alt did not respond to a request for comment. Sean Needham, who works for Ohio-based law firm Reminger and is representing Laidlaw in his lawsuit, also did not respond to a request for comment. 

The two parties also disagree on the valuation date. Laidlaw contends it to be March 31, 2026, while the defendants contend that the valuation date is May 31, 2026. Laidlaw holds 4.7 of about 109 Class A units, or roughly 4.3%. Wagner and an entity controlled by Alt together hold about 92% of Carnegie's Class A units, according to the operating agreement included in the complaint. 

Laidlaw gave notice April 27 that he planned to retire, which triggered Carnegie's obligation under its operating agreement to buy his units at fair market value. His decision to retire came about 15 months after Carnegie announced its acquisition of Eagle Ridge. A press release for that transaction noted that Eagle Ridge has $1.3 billion in assets under management, and increased Carnegie’s total assets by more than 25%. 

Laidlaw's registration as an investment adviser representative with Carnegie ended July 9, and he shows no current registration, according to his SEC IAPD record. He had been managing partner with Eagle Ridge since 2015. 

Requests from Laidlaw to inspect Carnegie's internal books on May 12, May 28 and June 17 were allegedly ignored or rebuffed. On June 10, he was allegedly told the records were "not necessary or appropriate for a valuation." He says he learned on July 20 of discrepancies among the firm's reviewed financial statements, internal statements and tax returns.  

Alleged self-dealing 

The complaint also alleges that Alt asked to hire an internal controller, but Wagner refused, which is “further evidencing his complete control over the internal books, records, financial statements and accounts,” per the complaint.  

The suit also alleges that Alt and Wagner diverted third-party advisory or incentive fees for personal use— an unspecified amount in 2025 and $2.2 million in 2026. It also alleges that Alt and/or Wagner had Carnegie pay for a private jet and travel to personal residences in Utah, Florida, Pennsylvania, New York, and Grenada, among other outside business ventures that were concealed in “self-dealing” expenses. Laidlaw argues those costs depressed the earnings used to price his exit. 

Carnegie reported $7.5 billion in regulatory assets across 8,541 accounts and 69 employees in its July 2026 Form ADV filing, including a nine-person advisory staff in Stamford, Conn. In October 2025, Carnegie added AHL Investment Management, a Florida firm with approximately $220 million in AUM. Crain's Cleveland Business reported in March that Carnegie was ordered to pay $2.3 million in client damages following accusations of breach of fiduciary duty and civil conspiracy.

Shades of Marcum Wealth case

Laidlaw’s case echoes another Cuyahoga County lawsuit decided earlier this year in which a minority owner of a Cleveland-area RIA alleged that controlling partners manipulated financials in “shareholder oppression” amid a potential sale. In 2024, Wendy Eldridge, a former managing director at Marcum Wealth, accused the firm's CEO of manipulating profit-and-loss figures during sale negotiations with Hightower. A jury this year awarded her about $3.2 million. Eldridge happens to also now work at Carnegie as a retirement plan advisor since she joined the firm July 2024.