Prime Capital Financial is facing a lawsuit from a former advisor who alleges breach of contract by the firm, according to Advisor Hub
The advisor, San Diego-based Stephen D. Ambrosini, joined Prime Capital when it acquired his RIA 20/20 Capital Management in 2021. He recently filed a complaint in California Superior Court seeking to force Prime Capital to abide by the terms of a termination letter and acquisition agreement implemented when he sold his firm.
The AdvisorHub report, citing the details of Ambrosini’s complaint, said that he agreed to be an independent contractor for Prime Equity with a guaranteed salary and retire after five years, while also receiving 70,450 shares in Prime Capital. Ambrosini alleges that he received a letter in December from Prime Capital CEO Glenn Spencer terminating his contract two years early without cause and immediately restricting him from contacting customers.
Though the letter stated that the termination would trigger mandatory redemption of any Prime Capital shares, Ambrosini states that the firm missed its first redemption payment of “at least” $131,200 due April 30 and has not responded to repeated demands. He said the firm is required to buy back as much as $328,000 in equity in Prime. Ambrosini’s lawyer, J. Scott Russo of Russo & Duckworth in Newport Beach, California, was quoted as saying that Prime Capital believes that by exercising their right to terminate his employment, they do not have to make any further payments.
A spokesperson for Prime Capital declined to comment on the lawsuit.
It is the second suit filed by Ambrosini against the firm in the past year. In May, a judge in the same court entered a default judgment ordering Prime Capital to pay $517,975, the amount Ambrosini said he was owed as part of the “annual guaranteed payment” under the five-year contract.
“They had a right to terminate,” Russo said. “What doesn’t make sense is that if you have a five-year guaranteed amount and it coincides with your required retirement, that they could then terminate it earlier and not pay you for it.”
Ambrosini also attempted to prevent Prime Capital from enforcing what he called unreasonable non-compete and non-solicitation provisions, but the court did not rule on that aspect of the lawsuit.
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.
