A federal judge ruled that a breach of contract lawsuit against two financial advisors and the wealth management firm they joined can move forward, reports Financial Advisor.
The advisors, Alan Markfeld and Chris Geary, were with insurance broker Arthur J. Gallagher & Co. until October 2025 when they resigned to join Granite Wealth Management, affiliated with Wells Fargo. Gallagher then filed a lawsuit accusing the two of taking more than 140 client accounts and confidential business information with them when they departed.
Gallagher’s suit included allegations of breach of contract, fiduciary duty, conspiracy and related claims. U.S. District Judge Roderick C. Young of the Eastern District of Virginia has dismissed a tortious interference claim by the defendants and will allow the lawsuit to move forward.
The defendants contended that Gallagher lacked standing to sue because some client accounts were maintained through a third-party broker-dealer. Gallagher connects clients with Osaic Wealth for certain annuity and nonretirement brokerage accounts
But that argument was rejected by Young after Gallagher contended that the defendants’ actions caused the company a direct economic injury through the loss of the over140 client accounts transferred to Granite, reduced assets under management and lost revenue. It was determined that the plaintiffs had standing to sue under Article III of the U.S. Constitution, which provides that a lawsuit brought in federal court must be based on an actual or imminent alleged injury that is concrete and particularized.
Gallagher asserted that Markfeld and Geary had employment agreements that included restrictive covenants, confidentiality provisions and a requirement that they provide 21 days’ notice before leaving.
According to the published report, Gallagher alleged the two systematically extracted protected client information before they departed, including client identities, assets under management and account reports. The insurance firm presented forensic evidence that Markfeld and Geary downloaded and printed multiple books of business and client account reports during the two months before they left.
Young said that evidence, combined with Gallagher’s immediate loss of clients, strongly supported the firm’s allegation that the former employees took confidential information and used it to solicit Gallagher clients. Gallagher is pursuing damages and other relief tied to the alleged loss of client relationships and confidential information.
In July, Young partially granted Gallagher’s request for a preliminary injunction after finding the company was likely to succeed on its breach of fiduciary duty claims. The judge barred Markfeld and Geary from proactively soliciting Gallagher clients using the company’s confidential information.
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