Hightower dismissed claims it introduced towards a former advisor days earlier than a choose was set to rule on the RIA’s demand for an injunction towards him.
The Chicago-based RIA acquirer sued Lars Knudsen in Illinois federal courtroom final March, alleging that he broke non-compete agreements weeks after the agency fired him for, amongst different issues, allegedly bringing a gun into the workplace in violation of firm coverage.
Knudsen fired again in Washington federal courtroom, accusing Hightower of “hijacking” advisors’ books of enterprise and cornering them into signing legally unenforceable restrictive covenants earlier than pushing that advisor out “on pretextual grounds,” in keeping with the criticism. In line with Knudsen’s lawyer, the agency ran a “disinformation marketing campaign” towards their former worker.
In a discover dated Oct. 4, Hightower knowledgeable the choose within the Illinois courtroom continuing that each one the claims earlier than the courtroom had been “voluntarily dismissed, with out prejudice.” In line with courtroom information, the choose within the case was set to rule on an injunction on Oct. 10 after a number of delays.
In an announcement, Knudsen stated he believes Hightower dismissed their claims as a result of it feared the courtroom would rule in his favor. He stated the method had taken a monetary and emotional toll on his household.
“It’s each a reduction and a frustration that Hightower backed down, however not earlier than I spent 1000’s of my financial savings defending what I knew to be true—they only needed my shoppers’ belongings and would do and say something to maintain them,” Knudsen stated.
Knudsen based Triad Wealth Administration however transitioned that enterprise to Hightower in 2014 and labored within the agency’s Bellevue, Wash. department. In 2018, that agency based Hightower Bellevue Advisors, gaining extra autonomy whereas retaining the advantages Hightower presents. The next yr, Hightower acquired a bigger curiosity, main Knudsen to signal a non-compete clause.
Knudsen contended that two advisors Hightower added to the group in 2022 led to a profound change within the agency’s tradition. Although Knudsen didn’t plan to retire quickly, he accused Hightower of pressuring him to take action whereas different advisors made disparaging feedback about him to shoppers to push him out.
Nevertheless, Hightower accused Knudsen of failing to separate agency earnings along with his companions and diverting greater than $225,000 in shopper charges for his personal use.
One accomplice even accused Knudsen of bringing a loaded gun into the workplace on a number of events, at one level placing the weapon on the desk throughout a “termination dialog” with an worker. The agency fired him and claimed that he reached out to former shoppers afterward, warning them their cash was “not secure.”
Knudsen denied the allegations, together with the claims in regards to the gun. He acknowledged that he’d unintentionally introduced his firearm into the workplace one time a number of years earlier, however upon realizing the error, he instantly introduced it again to his automobile.
In April, a Washington state choose dominated that Hightower couldn’t distribute Knudsen’s Kind U5 to anybody moreover a regulatory authority and couldn’t disparage him to shoppers.
In statements provided by Knudsen’s lawyer, a number of of his shoppers, together with Anthony Kaufman, stated they had been dismayed when Hightower fired their long-time advisor.
“It grew to become clear to me with the interplay with Hightower that they’ve a poisonous company tradition that disregards each the crew members and their shoppers,” he stated. “What actually upset me is that they painted Lars as somebody who was irresponsible or fraudulent. Anybody who is aware of Lars would see proper by the sham, as I imagine the courts will.”
Lengthy-time Knudsen shopper Jeff Snedden claimed he’d solely obtained a quick telephone name saying Knudsen was not with Hightower. When he probed additional, the agency refused to offer any particulars. When he briefly suspended Hightower’s advisory function whereas contemplating his choices, Snedden stated the agency “instantly terminated” the connection.
“This made it crystal clear to me that Hightower was as interested by punishing Lars’ long-standing shoppers as they had been in punishing Lars personally,” he stated. “For my household, this was past the pale—an act of conceitedness that confirmed Hightower had no concern for my household’s monetary wants or well-being.”
At present, the Illinois case ended with Hightower dismissing the claims, and Hightower’s remaining claims towards him are continuing in arbitration. A Hightower spokesperson stated the agency doesn’t substantively touch upon pending litigation however seems to be ahead “to pursuing all of our claims in binding arbitration.”
Moreover, Knudsen filed a lawsuit towards the 4 different principals at Bellevue Hightower, arguing they diverted funds from the agency to forestall him from receiving the compensation he was owed. (The 4 principals had been additionally named in Knudsen’s unique Washington state lawsuit filed in March.)
