A former broker for Raymond James Financial is challenging an arbitration ruling which found that she violated rules by soliciting former clients after selling her practice to a father and son team, Advisor Hub reports.
In May, a three-member Financial Industry Regulatory Authority panel ruled that Nicole Sennett is liable for $2,557,000 in compensatory damages to Scott A. Brantingson, and his son, Scott M. Brantingson, as well as to the firm they founded, Monocacy Wealth Partners based in Bethlehem, Pennsylvania. Monocacy is affiliated with Raymond James Financial Services Inc.
The Brantingsons and Monocracy asserted that Sennett violated the purchase agreement by pursuing former clients, and in June 2023 they filed a statement of claim against her that included accusations of breach of contract, misrepresentation, defamation and tortious interference with contract, misappropriation of trade secrets.
Sennett, based in Wayne, Pennsylvania, is now trying to overturn the arbitration decision and is asking that the case be heard again before a new panel. She claims that the FINRA arbitrators exceeded their authority by issuing what she called an “overbearing” ruling going beyond what was requested by the Brantingsons and Monocracy. She asserts her practice was worth $2.3 million when she sold it and added that only about one fifth of her former clients returned to her when she restarted her practice.
“The arbitrators have not served justice through this award,” Sennett’s lawyer, Jeremy Halpern of Shumaker, Loop & Kendrick in Sarasota, Florida, said in a statement. “The arbitrators blind-sided Nicole Sennett by granting relief that was never requested and which went far beyond the scope of the panel’s authority.”
Besides unspecified damages and disgorgement of revenue received from poached accounts, and interest and fees, the Brantingsons and Monocracy asked to be cleared of owing Sennett money or anything else related to the purchase agreement and related agreements. They also sought a declaratory judgment that Raymond James Financial Services Inc. should pay them all monies withheld relating to the accounts at issue.
Sennett denied violating the purchase agreement and, in a counterclaim, contended it was the Brantingsons who had broken the agreement by refusing to allow her to review the books and records, which she said she was entitled to inspect.
Sennett also claimed that the award violates FINRA rules because it bars her from serving former customers even if they seek to transfer their assets without her encouragement.
Monocacy alleged that Sennett had improperly taken back around 20% of “the clients and goodwill” under the asset purchase agreement, and that she may “at some point in the future, take back more of the clients and goodwill.”
If you are looking to move from one firm to another, planning to go open up or join an RIA, looking to sell your firm or grow through acquisition or bringing on new advisors, the attorneys at Hyman Cotter PC have the experience to guide you through the process to protect your interests. Regardless of whether the transition involves protocol or non-protocol firms, we will properly advise you so that you can focus on your transition and we will work to limit the risks you face during this transitional period. For more information, contact Hyman Cotter PC at 312-291-4600 or through our online contact form for a free consultation.
