Financial Advisor Awarded $376,000 in Partnership Dispute
From the desk of Jim Eccleston at Eccleston Law
Financial advisors often partner with other financial advisors, but how they document the arrangement is critically important.
As reported by InvestmentNews, a recent arbitration dispute involved Miami-based financial advisors Eduardo Augsten and Gustavo Vega. The two former partners were embroiled in a conflict over the revenues from their shared book of business. The dispute arose because they operated under a "handshake" agreement rather than a written contract, a decision that led to significant complications.
On May 17, a panel of three FINRA dispute resolution services arbitrators awarded Augsten $376,000. Augsten’s complaint was filed in January 2020 following the dissolution of their joint firm, Wealthengage. He sought unspecified compensatory and punitive damages, joint office and lease reimbursement, and other related expenses. Augsten aimed to secure an "equitable lien on the revenues" generated from client fees and commissions and compensation for any debts incurred after the partnership ended.
The panel’s decision highlights the importance of formal agreements in professional partnerships to prevent similar disputes.
Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.
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