Hightower claims a former advisor broke a non-compete agreement just weeks after the firm fired him, according to a suit filed in Illinois federal court.
The Chicago-based RIA acquirer alleged that Lars Knudsen was fired in late February for bringing a gun to the office in violation of company policy, among other allegations.
Now, they claim he reached out to former clients to disparage Hightower while maneuvering to start work at a competitor firm. Hightower requested that the court issue a temporary restraining order to stop further harm to their business.
“If these remaining clients are diverted away, Hightower will lose these relationships for years into the future,” the complaint read. “The damages that flow from such an occurrence are huge and extremely difficult to quantify.”
But Knudsen's filed his own suit in Washington federal court, alleging the RIA "hijacks" advisors' books of business and corners them into signing legally unenforceable restrictive covenants before pushing that advisor out "on pretextural grounds," according to the complaint. Andrew R. Escobar, a partner with the law firm Seyfarth Shaw, is representing Knudsen and said Hightower was "engaged in an unseemly disinformation campaign" against him.
"It’s no secret that HighTower is known for its strong-arm bully tactics that are nothing less than predatory," Escobar said. "Our lawsuit outlines how Hightower is systematically pushing Lars out of his profession by spreading false and misleading information to his long-time clients so as to poach his clients and their millions of dollars in financial assets.”
Knudsen is a Washington state-based advisor who founded Triad Wealth Management. He transitioned that business to Hightower in 2014 and then worked in the firm’s Bellevue branch.
In 2018, the principals at that firm formed HT Bellevue Advisors, which allowed them more independence (and ownership stakes), while still operating as Hightower advisors for the firm’s Bellevue clients. In 2019, Hightower acquired a greater interest in the firm, allegedly netting Knudsen $900,000 and significant equity.
As part of the agreement, Knudsen signed a covenant restricting his actions should he leave or be fired from the firm. In particular, the agreement barred Knudsen from “contacting or soliciting Hightower clients” or competing against the firm for 24 months after any “involuntary termination.”
According to Hightower, Knudsen’s troubling behavior led them to fire him in late February.
Through an internal investigation, Hightower allegedly found that Knudsen didn’t split earnings with his firm partners and diverted about $235,600 in client fees belonging to the firm.
Knudsen also allegedly spent firm funds on personal items (but blamed his staff for not making the proper distinction). According to Hightower, other partners at the firm said Knudsen would routinely bill the practice for personal expenses and would “feign ignorance” when confronted but return to the same practices within a few months.
Randall Williams-Gurian, a managing partner and senior advisor at HT Bellevue, also submitted a declaration to the court that Knudsen brought a loaded firearm into the office on multiple occasions.
“Interviews with several staff members indicated that they were aware Knudsen brought a firearm into the Hightower Bellevue office and that he discussed it often, admitting to one person that the sound she heard from outside his office had been his gun going into his holster,” Williams-Gurian wrote. “Other staff members have been present while his gun was displayed in the room, including on the table during one termination conversation.”
Hightower claimed that several days before he was fired, Knudsen requested a spreadsheet with the names, numbers and emails for all of his clients; he never returned the information, the firm claims in the suit.
Hightower also claimed Knudsen was seeking employment at the Seattle-based firm Hohimer Wealth Management (though Knudsen is not listed as an advisor on the firm’s site, nor has he registered with the SEC at that firm). Hohimer Wealth did not respond to a request for information prior to publication.
In the interim, the RIA claimed “multiple clients” said they’d been contacted by Knudsen, who told them their money was “not safe” with Hightower, urging them to “delink their accounts,” according to the suit.
In one case, an unnamed client told Hightower that her parents had been “unsettled” by a call from Knudsen. The client also had her own questions for Hightower, as Knudsen had questioned whether the remaining partners at the Bellevue firm could run the business, according to the complaint.
Knudsen disputed all of this in his suit, claiming Hightower had been spreading false information to Knudsen's clients, including that he retired. He called the allegations he stole funds from Hightower and the partners at the Bellevue firm "completely baseless."
Knudsen contended that two advisors Hightower added to the group in 2022 brought about a profound change in culture at the firm. In 2024, Knudsen argued, Hightower moved to push him out, saying that there was one incident five years before in which he accidentally left his firearm on when entering the office. After a co-worker asked if he was "carrying," Knudsen said he realized he still had the gun and brought it back to his car, where he allegedly kept it locked in the glove compartment.
“All I want to do is practice the profession I love and serve my clients," he said in a statement about the suit. "What I thought could be a short conversation with Hightower to do just that has now turned into a battle against a well-funded behemoth. I believe Hightower is calculating its possible sale price by inflating its assets through attempting to take my client base, ruin my reputation and bar me from practicing my profession."
A Hightower spokesperson said that although they couldn’t comment on the substance of pending litigation, "Hightower intends to seek enforcement of its agreements, specifically including the protection of client information, to the full extent allowed by law. We look forward to vigorously pursuing our claims and to obtaining appropriate relief from the Court.”
Last month, a former advisor filed a suit against Hightower in California federal court, claiming the restrictions in his contract made continuing in the industry impossible. Darren Reinig’s firm was acquired in 2019, and he stayed with Hightower until deciding to start a new RIA business this year.
But Reinig claimed the agreement bound him from starting any business that Hightower may engage with, and he could not contact “any Hightower client,” which could extend to hundreds of businesses over dozens of states (Hightower refrained from commenting on the litigation).