UBS is taking legal action against the ESOP Group, a high-producing advisor team in Atlanta, after they left the firm to join RBC Wealth Management. The lawsuit alleges that the team began contacting former UBS clients in violation of their nonsolicitation agreements.
Led by Leslie Lauer, Rebecca Glasgow, and Curt Rubinas, the ESOP Group was responsible for managing over $5 billion in assets at UBS and generated an annual revenue of more than $21 million. However, UBS argues that a significant portion of their business was inherited through the ALFA program, which facilitates the transition of client accounts to younger advisors as senior advisors approach retirement.
According to UBS, each member of the ESOP Group signed ALFA agreements in 2020, which included a five-year transition period and a commitment not to solicit any of the practice's clients should they decide to leave UBS for another firm. However, upon joining RBC, UBS claims that the team immediately disregarded these contractual obligations and began soliciting their former UBS clients.
The lawsuit includes evidence of a text message sent by an RBC manager, a former UBS employee, to a current UBS employee. The message suggests that they have "cracked the ALFA code" and implies that if they were successful with Leslie Lauer, they could also target other advisors and teams. UBS interprets this as a reference to the nonsolicitation agreements in question.
UBS is seeking legal remedies for what they perceive as a breach of contract. The ESOP Group members and RBC have not yet provided official comments on the lawsuit.
Legal Battle Ensues Between UBS and Former Employees
UBS, a prominent financial institution, has filed a lawsuit against several of its former employees, alleging that they engaged in client-solicitation activities despite agreeing to non-solicitation covenants in their partnering agreements.
According to the lawsuit, the defendants, including Lauer and others, assured UBS management through text messages that they would not contact clients of other UBS financial advisors. However, UBS claims that these defendants have been actively soliciting these clients to move their assets to RBC, providing false information about UBS to persuade them.
The lawsuit further asserts that the defendants have already transferred over $16 million in client assets to RBC, with commitments to transfer hundreds of millions more in the near future.
Of particular concern to UBS is the defendants' alleged possession of thousands of pages of printed documents, including client lists, which were produced shortly before their departure. UBS argues that the timing, volume, and content of these documents strongly suggest that they were intended for use in the defendants' transition to RBC rather than for legitimate UBS business purposes. While the defendants deny taking any confidential information, UBS finds their printing activities highly suspicious and believes that confidential information may have been misappropriated.
To protect its interests, UBS is seeking an injunction that would prohibit the defendants from soliciting their former clients until the end of their five-year agreement as stipulated in the ALFA program.
Ensuring fairness and integrity within the financial industry is crucial, making this legal battle between UBS and its former employees a matter of significant importance.