FINRA awards Intellivest over $900,000 in claim over employee and client poaching

On Behalf of | Jan 17, 2022 | FINRA Compliance

The Financial Industry Regulatory Authority has ruled in favor of Georgia-based Intellivest Securities over its claim that another firm poached its employees and clients, FinancialAdvisor reports.

In its ruling, FINRA’s arbitration panel ordered Growth Capital Securities to pay Intellivest over $900,000 in compensatory damages, punitive damages, costs and attorneys’ fees.

The dispute between the companies dated back to April 2018, when two broker-dealers, Shawn Lesser and David Whelchel, departed Intellivest and expanded their own firm that affiliated with Growth Capital Securities. Intellivest said that the two took two other registered representatives with them to the new company, along with dozens of clients. As a result, Intellivest President and CEO Daniel Kolber said his firm, which had fewer than ten employees, had to virtually shut down all of its business operations.

Kolber filed a complaint against Growth Capital Securities alleging, among other things, that the other company had induced breach of fiduciary duty and duty of loyalty, engaged in unfair competition and misappropriated trade secrets. Reacting to the arbitrators’ decision, Kolber said he had “been vindicated.”

A previous dispute between Intellivest and its former representatives was brought before a FINRA arbitration panel in 2018, after Lesser and Whelchel claimed they were still owed commissions from their relationships at Intellivest. That claim and a counterclaim by Kolber were both dismissed by the arbitrators in 2020.

Handling financial services disputes requires counsel with a significant understanding of the industry, the laws, rules and regulations that impact our clients and the forums in which disputes are adjudicated. At Lewitas Hyman, our attorneys’ unparalleled litigation experience comes from leveraging their industry-specific knowledge developed from working at firms such as Morgan Stanley, UBS Financial Services and EVEREN Securities, serving as outside counsel for some of the world’s largest law firms, and through prior affiliations with the SEC. For more information about our arbitration and litigation services, contact us at (888) 655 6002 or through our online contact form.

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