California RIAs Falcon Wealth and Parallel Advisors are mired in a lawsuit stemming from allegations that former Falcon employee Nicole Amore misappropriated sensitive business information amid her transfer to Parallel Advisors.
Falcon Wealth claimed in its April filing with Judicial Arbitration and Mediation Services (JAMS) that Amore breached an agreement to not solicit the company’s current or prospective clients after she resigned from the RIA in February. She joined Parallel that same month as a wealth advisor, according to her LinkedIn profile. Amore has since filed a legal complaint in the San Bernardino County Superior Court to block Falcon’s attempted arbitration proceeding.
“Falcon Wealth has a duty to protect the integrity of our client relationships and the confidentiality of our business,” Falcon Wealth founder and CEO Gabriel Shahin said in a statement to InvestmentNews. “When we see clear evidence of misappropriation of sensitive information and solicitation in violation of signed agreements and our policy, we have every right to act decisively. This legal proceeding is about accountability and safeguarding not only our firm and clients, but also the ethical standards our industry relies on.”
Parallel Advisors did not respond to email outreach from InvestmentNews. According to reporting from Citywire, Falcon claimed in its arbitration filing that Amore downloaded or took screenshots of client contact information and shared it to her personal devices, while also contacting clients about her move before and after her departure.
Falcon is seeking unspecified monetary damages. Amore, who is being represented by the law firm Sanders Roberts, claims that the non-compete and non-solicitation agreements that Falcon aims to enforce are illegal under California Business and Professions codes 16600 and 16600.5. The transfer of client information upon advisors shifting firms is often a source of conflict in the advisor industry, with broker-dealer giants Ameriprise and LPL embroiled in an ongoing legal battle that has spanned the past year.
Ontario, California-based Falcon Wealth manages about $1.2 billion in assets, while Parallel Advisors is based in San Francisco and manages over $9 billion in assets. Parallel announced two hires earlier this month. Former Schwab Advisor Services executive Tony Parkin joined Parallel as its head of advisors, while former Avalon Advisors COO Gary Bonner was named head of business analytics and technology at Parallel, which is majority owned by the private equity firm Golden Gate Capital.
Mayer Brown, GWG's law firm, agreed to pay $30 million to resolve conflict of interest claims.
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