An advisor formerly affiliated with LPL Financial claims the firm stole his business from under him, allegedly bringing his managed assets from about $450 million to zero overnight.
Mark Lamkin filed a suit in Kentucky state court that was bumped up to federal court this week, naming his firm, Lamkin Wealth Management, as the plaintiff against the massive independent broker/dealer.
“Simply put, LPL orchestrated, assisted and executed a classic corporate raid against LWM, its own affiliate, by the actions of three of LWM’s employees, who were at the time also affiliated with LPL,” the complaint read.
LWM offered financial services including wealth, estate and risk management planning for clients, and was affiliated with LPL starting in February 2001. This arrangement meant LPL was “initimately familiar with nearly every aspect of LWM’s business,” according to Lamkin’s suit.
In 2008, LWM hired Jonathan Upton as a financial advisor and brought on Gregory Smith in the same role in 2012. The firm added Bruce Lindsay and his book of business in 2015. All three employees allegedly signing non-compete, non-solicitation and trade secrets agreements.
But starting in 2017, Lamkin began to get cold feet about LPL, particularly after the IBD handled compliance issues with LWM advisor Don Woods. FINRA eventually fined Woods $10,000 and suspended him for six months for inflating customers’ net worth on applications for real estate investment trusts.
Lamkin said the ordeal created so much bad blood between him and LPL that he began looking for a new broker/dealer partner in late 2017.
But Lamkin claimed LPL began working with Lindsay, Smith and Upton behind his back, “creating an atmosphere of fear and intimidation at LWM including causing Lindsay, Smith and Upton to fear that their livelihoods were in jeopardy” if they didn’t leave LWM and steal its clients, according to the complaint.
The complaint also alleges that Lindsay, Upton and Smith “falsely assured” him they would stay on board until LWM switched broker/dealers, all the while accessing and downloading client information with LPL’s direction and support.
In August 2018, LPL terminated its affiliation with Lamkin, though the three advisors allegedly claimed they’d remain with LWM until Lamkin found a new b/d affiliate. But, Lamkin argued, LPL reached out to the trio, telling them “they needed to get out of LWM, that they needed (and were highly encouraged) to take client files from LWM, and that they needed to disassociate from LWM” as soon as possible, according to the suit.
On Dec. 5, 2018, the three advisors and their clients left LPL, allegedly without advance notice. According to the complaint, the move dropped LWM’s total assets under management from more than $451 million to zero overnight. According to Upton's LinkedIn profile, the trio started their own LPL-affiliated firm, Centris Wealth Management, before registering with FINRA as working for the LPL-affiliated Keystone Financial Group (the three advisors work out of Keystone's Louisville office, according to that firm's website).
Lamkin also accused LPL of trying to smear him with internal investigations, including one centered on a $1.26 million loan from a customer.
The case eventually ended up with FINRA, who found Lamkin had taken the loan without notifying LPL in violation of FINRA rules. Lamkin agreed to a $7,500 fine and 90-day suspension. Lamkin has been affiliated with Calton & Associates since 2018, according to his BrokerCheck profile.
Lamkin is seeking $10 million in compensatory damages in the suit, arguing that he would have sold his firm’s book of business in 2018 without the reassurances from Lindsay, Smith and Upton that they’d stay onboard through any transition.
Neither LPL nor attorneys for Lamkin Wealth Management returned requests for comment prior to publication.
