The Vanguard Group is suing one of its former financial advisers with super-high net worth for alleged breach of a one-year agreement it signed as an employee.
The financial services giant accuses Matthew Snipes of violating the contract and abusing trade secrets in his lawsuit filed June 9 in a federal court in North Carolina.
It’s the last legal battle between property management companies and consultants for customer relations. It is also the second time in recent weeks that Vanguard has filed a lawsuit against Snipes. The company ‘s first attempt, seeking a temporary restraining order, was rejected by a state judge.
The legal dispute between Vanguard and Snipes began after he resigned from the company on April 22 to set up an independent practice, Topsail Wealth Management, in Charlotte.
In addition to the alleged breach of non-invitation agreements, Vanguard accuses Snipes of breaching a contract he signed that required him to give 60 days notice before resigning.
There is a lot at stake in the disagreements between the two sides. Snipes served as an advisor to extremely high net worth clients, most of whom had invested $ 15 million or more in the company. In all, he oversaw about $ 4.75 billion in assets under management for Vanguard customers, whose business generated about $ 8 million in annual revenue for the company, according to the lawsuit.
One of Snipes ‘customers has already notified Vanguard that it is transferring $ 26 million worth of assets from Vanguard to Snipes’ new company, according to the lawsuit.
In Vanguard’s first attempt to seek legal redress, the company filed a May 31 lawsuit in a North Carolina court seeking a restrictive restraining order against Snipes for allegedly asking customers to meet him at Topsail. Snipes denied the allegations. A state judge rejected Vanguard’s request, saying it “failed to show a chance of success,” according to a June 6 order.
On June 8, Vanguard voluntarily dismissed the state court case against Snipes.
The company ‘s new lawsuit filed in federal court seeks unspecified damages, lawyers’ fees and other relief. The lawsuit alleges Vanguard is seeking redress from a federal court because the parties come from different states and the amount of damages claimed is more than $ 75,000.
A Vanguard representative could not be reached for comment. Snipes’s lawyer, Matt DeAntonio, declined to comment on the case.
While Vanguard is known for its asset management functions, the company also provides wealth management services to wealthy individuals.
Snipes began his career in financial services at Vanguard as a customer relationship partner in 2006, and eventually became a senior senior financial advisor in 2015, according to the lawsuit.
As a Vanguard consultant, Snipes was not actively seeking clients, according to the lawsuit. Instead, Vanguard recommended it to existing customers and potential customers. “In other words, the personal and financial information of Vanguard’s customers served by Snipes was not independently known to Snipes, but was provided to Snipes by Vanguard due to Snipes’ position,” the lawsuit states.
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