Mariner Wealth Advisors is still waging legal battles on several fronts, with numerous ongoing cases in federal and state court.
In one, Edelman Financial Engines is trying to stop Mariner’s attempts to dismiss the case, arguing the firm “has created a business model that free rides off the investments and success of its competitors.”
Edelman first filed its suit against Mariner in Kansas federal court late last year. In the original complaint, Edelman accused Mariner of luring away 10 advisors and incentivizing them to break employment contracts. Edelman claimed to lose about $621 million in assets in the process.
But Mariner struck back in December, accusing Edelman of waging a multi-year campaign to “unlawfully stifle fair competition.”
In the meantime, Mariner has made numerous attempts to strike down Edelman’s suit. In December, Mariner argued the lawsuit should be paused while four pending arbitrations against some of the advisors who left Edelman continue.
But in March, the court denied the motion, arguing Mariner hadn’t established that the arbitrations would have any restrictive effect on the case in Kansas federal court.
Last month, Mariner took another bite at the apple, arguing the case should be dismissed because Edelman hadn’t revealed enough facts to support their allegations, with claims “premised on purported statements which are mere hyperbole or opinion.”
Edelman filed back on April 8, calling Mariner’s motion “another delaying tactic.”
“Quite simply, Mariner builds its assets under management through unlawful methods, including blatant interference with competitors’ contracts and client relationships and misappropriation of competitors’ trade secrets,” Edelman’s response read.
Edelman’s response offered more detail to the accusations against Mariner. It alleges the advisors who left Edelman recreated a client list from memory with Mariner’s help, including names and the amount of assets. Mariner also tied compensation to performance milestones, assuming the planners would convince Edelman clients to move assets to Mariner.
In trying to poach Edelman’s clients, Mariner agents allegedly told Edelman employees that “Edelman is a sinking ship,” “everyone is jumping overboard” and that Mariner was running Edelman out of business, according to Edelman.
“In addition, Mariner agents have asked Edelman employees the following rhetorical question: “Do you really want to be the last planner standing at the firm?” Edelman’s response read.
Mariner did not respond to requests for comment prior to publication.
Meanwhile, in Los Angeles Superior State Court, RWA Wealth Advisors’ lawsuit against Mariner is proceeding apace.
The firm filed its lawsuit in January, alleging that Mariner ran a “clandestine” scheme with advisor Brendon Berman acting as a “secret agent” to pilfer client lists of his employer, Polaris Wealth Advisory Group, before he left for Mariner (RWA acquired Polaris in 2022).
But in its response to RWA filed March 18, Mariner demanded a jury trial and excoriated RWA, claiming the firm’s “allegations ring hollow as conspiracy theories and disparaging rhetoric.”
“This is a case about a company choosing to target a competitor with frivolous litigation, rather than examine and address the reasons why its financial advisors take their business elsewhere,” Mariner’s response read.
Mariner argued RWA lacked evidence to support the allegations, claiming the idea they “coached” Berman to steal trade secrets was false, and noting Berman was represented by his own counsel during the transition. Mariner also questioned why RWA had sued Berman in May 2022, seeking recovery for the same actions, according to the response.
“The gamesmanship is transparent,” the Mariner response read.
Additionally, the $43 billion tax-centric planning firm Avantax is embroiled in its own suit against Mariner, filed in Iowa state court last fall before it was bumped to federal court in January. Avantax accused advisor Michael Carignan of breaking the terms of his restrictive covenants when leaving for Mariner with the latter firm’s “support and encouragement.”
Avantax also sued Mariner and former advisor Molly Nelson in February, alleging similar actions after she moved to Mariner. This week, Avantax voluntarily dismissed their case, but Nelson’s own suit against Avantax is ongoing. Nelson argues she trying to break what she alleges are “unenforceable” restrictive covenants demanded by Avantax.
According to a new motion from Mariner in the Carignan case, Avantax allegedly wanted the Carignan and Nelson cases tried in the same jurisdiction “to avoid the risk of inconsistent rulings.” Therefore, Mariner wants that case moved back into Iowa state court (the decision on this is pending).
