Edelman Financial Engines is seeking a restraining order against Prime Capital Financial, claiming the firm poached two more Edelman planners and encouraged them to breach their employment contracts.
The call for a retraining order is the latest volley in a federal suit that began last November, in which Edelman sued Prime Capital and accused the competitor of “a coordinated and concealed scheme to pillage” the firm by stealing Edelman’s client information.
The newest restraining order concerns Joan Greenspon and Amanda Salyer, two former Edelman advisors who managed over 650 clients $550 million in assets in Edelman’s West Conshohocken, Pa., offices. According to Edelman, Prime Capital recruited the two advisors who followed “Prime Capital’s playbook to the tee.”
“Greenspon and Sayler (now Prime Capital’s agents) have stolen confidential Edelman client lists and are actively soliciting Edelman’s clients to move their business to Prime Capital,” the motion read. “Continued unlawful client solicitations are sure to follow.”
Edelman’s legal squabbles with Prime Capital extend back to last February, when Edelman added the latter firm as a defendant in three ongoing suits concerning former Edelman advisors who left for Prime Capital. After Edelman directly sued Prime Capital last November, the latter firm moved to pause the suit, claiming the issues were already being addressed in the three lawsuits and ongoing arbitration claims (the Delaware federal court judge overseeing the case has not yet ruled on Prime Capital’s motion to stay).
According to the latest motion (and mirroring allegations in previous filings), Prime Capital’s approach is to contact Edelman planners “with substantial client lists,” with Edelman singling out Grant Spencer, Prime Capital’s M&A Director (and son of the company’s CEO).
After persuading the advisors to leave, Prime Capital allegedly instructs them to remain at Edelman for several months to gather client information, and then to resign under the direction of their new employers, before recreating their client lists and contacting them to move their business.
“Lacking the infrastructure and investment that Edelman built over decades, Prime Capital and its senior executives chose shortcut over effort, recruiting Edelman’s planners—specifically those managing eight- and nine-figure AUM—and directing them to use Edelman’s confidential information to solicit Edelman’s clients for Prime Capital’s gain,” the motion read.
According to Edelman, Greenspon and Salyer followed this playbook, resigning by mail on February 13 (before the three-day Presidents’ Day holiday weekend), and sending their resignation letters to Edelman’s offices in Santa Clara, Calif. – the letters allegedly didn’t arrive until mid-week, allowing the advisors days to solicit clients uninterrupted.
Edelman claims that non-solicitation agreements barred Greenspon from soliciting or accepting business from Edelman clients for 15 months, while Salyer cannot solicit clients for a year or accept business from Edelman clients for 18 months.
Edelman did not comment on the specifics of the case, but Allison Amadia, the firm’s Chief Legal and Risk Officer, said the firm was “committed to protecting and advancing our business and the talented professionals who deliver deeply personal, high‑impact advice to clients every day.” Prime Capital did not return a request for comment as of press time.
In the motion, Edelman called for a restraining order against any solicitation of Edelman clients or the use of allegedly stolen client information, as well as expedited discovery in the case.
In previous suits by former Edelman advisors who sought to break their contracts after moving to Prime Capital, the reps claimed that rumors of a failed sale of the firm had eroded employee and client confidence.
In the dual suits filed late last year, John Sayers and Eric Pailing argued Edelman suffered from “short-sighted policies and fundamental corporate changes,” including the rumors of a sale after firm leadership assured employees the company wasn’t for sale.
