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

I learned two important things working with Eccleston Law. First, I made a friend and ally with Jim and Steph for life. Secondly, and this is a crucial life lesson - if you need counsel, then seek out the very best. Jim was referred to me by a most trusted source. I've never had to hire an attorney for anything. Now, I know the value of hiring an important partner. Meticulous, thorough and detailed in preparation is the best way to describe Jim. Brilliant too, I might add. Bottom line, I would highly highly recommend Jim and Stephany for your legal needs. One of the best life decisions I've ever made.

Howard S.

LATEST NEWS AND ARTICLES

January 17, 2025
FINRA Suspends and Fines Advisor for Misleading L Bond Sales

The Financial Industry Regulatory Authority (FINRA) has suspended and fined Alan Mason for violating Regulation Best Interest by recommending high-risk L bonds to a retail customer.

January 16, 2025
Former Merrill Lynch Advisor Wins Expungement of Allegations Tied to CBD Business

Charles Thomas “Todd” Mercer Jr., a former top Merrill Lynch advisor, successfully cleared his public record of allegations that hindered his ability to attract clients after transitioning to an independent practice. 

January 16, 2025
Attorney Eccleston Receives 2025 Top-Rated Lawyer Recognition

James Eccleston has been recognized as a top-rated lawyer with a superb attorney rating in 2025 by the Martindale-Avvo legal community.