Primerica Financial Services has filed a lawsuit against Osaic Wealth alleging a scheme was carried out to raid its business assets, according to Investment News.
The suit, filed in Georgia federal court, alleges “illegal corporate raiding and other improper attacks” on Primerica and seeks over $50 million in compensatory and punitive damages. Primerica contends that Osaic conspired with several West Virginia Primerica advisors to take confidential information and solicit clients in violation of employment contracts.
The complaint states that advisor Brian Collins, while still employed at Primerica’s branch in Hurricane, West Virginia, recruited other representatives to join him at Osaic and that the group’s departure resulted in the loss of more than 96% of the Hurricane branch’s assets under management. Collins left to launch Legacy Investment Advisors & Wealth Management and affiliated with Osaic.
Primerica claims that Osaic convinced Collins and others to work as “double agents” against Primerica to prepare for the movement of client information as well as most of the staff to Osaic. The lawsuit claims that the defendants orchestrated the departure of six representatives who served 2,800 clients with $530 million in assets and life insurance policies valued at more than $184 million in force.
According to the lawsuit, Osaic engaged in systemic recruiting practices using “large cash bounty payments” labeled as forgivable loans to entice advisors to break contracts and bring their clients with them.
“Osaic’s business is built on engaging in raids under cover of darkness – and then using the representatives that it acquires to violate their contracts and legal duties to steal business for the benefit of Osaic,” the complaint states. In addition to the damages sought, Primerica also seeks an injunction to prevent further solicitation of its clients.
The suit also names Legacy Investment Advisors & Wealth Management as a co-defendant, alleging that Osaic also enlisted Legacy as “a joint participant and coconspirator in that scheme and is actively using Legacy as a corporate shill to complete its pirating activity.”.
In response to the lawsuit, an Osaic spokesperson denied the allegations, stating, “Osaic firmly disagrees with the characterization of the conduct alleged by Primerica and believe this suit to be without merit. The advisors who chose to affiliate with Osaic have taken intentional steps to fully honor their contractual obligations including refraining from client solicitation and preserving any Primerica materials for retrieval.”
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