Tr?id=566623520170033&ev=PageView&noscript=1

RIAs Increasingly Rely on Non-Competes Borrowed From Broker-Dealers

Posted on December 22nd, 2022 at 12:15 PM
RIAs Increasingly Rely on Non-Competes Borrowed From Broker-Dealers

Registered investment advisory firms (RIAs) have borrowed a legal tactic from the broker-dealer space, as RIAs increasingly take defectors to court with allegations of non-compete clause violations, according to a recent article published by AdvisorHub. 

RIA non-compete disputes are different, however.  First, the disputes are not adjudicated at Financial Industry Regulatory Authority (FINRA) Dispute Resolution, because neither party is associated with FINRA. Typically, the disputes start in court, and they will remain in court unless there is an arbitration clause, such as an American Arbitration Association (AAA) arbitration clause. 

Notwithstanding where they dispute is adjudicated, competent counsel must examine the contractual restrictions carefully, and then must test the enforceability of such restrictions against applicable state law.  There is no national jurisprudence, nor any one-size fits all approach. Finally, legal requirements and proofs vary in each state as to whether a plaintiff, in these cases a RIA firm, can obtain a TRO or injunctive relief.

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, regulatory and disciplinary matters, including disputes nationwide in courts and in arbitration surrounding restrictive agreements.

Tags:

Return to Archive

TESTIMONIALS

Previous
Next
Quotes Bigger

You were most helpful with my FINRA deposition. You are a good lawyer and a good person.

Dan B.

LATEST NEWS AND ARTICLES

1792610544 Law
October 21, 2026
FINRA Fines and Suspends Former LPL Broker Over Undisclosed Customer Settlement

The Financial Industry Regulatory Authority (FINRA) fined former LPL Financial broker Gregory W.

1792523173 Law
October 20, 2026
FINRA Orders American Portfolios to Pay $1.6 Million Over Unit Investment Trust Supervision Failures

The Financial Industry Regulatory Authority (FINRA) has ordered American Portfolios, the broker-dealer later absorbed into Osaic, to pay more than $1.6 million in restitution and fines over failures to supervise financial advisors who repeatedly recommended that customers sell unit investment trusts (UITs) before maturity.

1792432258 Law
October 19, 2026
FINRA Bars Former LPL Broker Over Alleged $1.7 Million Customer Theft

The Financial Industry Regulatory Authority (FINRA) has barred former LPL Financial broker Rudy Anguiano after finding that he converted more than $1.7 million from two customers, according to AdvisorHub.