Primerica Financial Services is accusing Osaic Wealth of “a deliberate and ongoing conspiracy and scheme to raid and pirate” the firm’s business.
Primerica Financial Services sued the independent broker/dealer in Georgia federal court (where Primerica is based), alleging Osaic conspired with several West Virginia Primerica advisors to take confidential information and solicit clients in violation of employment contracts.
In the lawsuit, Primerica alleged that this behavior is nothing new for Osaic.
“Just the opposite—its tortious conduct described here is deeply ingrained into its business model and its corporate culture,” the complaint read. “Osaic’s business is built on engaging in raids under cover of darkness—and then using the representatives that it acquires to violate their contracts and legal duties to steal business for the benefit of Osaic.”
According to the complaint, Osaic first contacted Brian David Collins, the senior Primerica representative at the firm’s Hurricane, W.V. office. Primerica alleged that instead of immediately departing Primerica, Collins stayed in his position to recruit other Primerica reps at the branch office to join him at Osaic.
Allegedly, Osaic convinced Collins and others to work as “double agents” against Primerica to prepare for the movement of client information (as well as most of the staff) to Osaic.
According to the suit, Collins formed Legacy Investment Advisors and Wealth Management shortly before the staff resigned to join Osaic on Oct. 17 (Primerica named the new firm as a co-defendant with Osaic).
Hours after leaving, the former Primerica reps allegedly affiliated with Osaic and Legacy. Primerica claimed that the six Primerica reps who joined Osaic managed about $530 million (or more than 96%) of the branch’s assets under management.
According to Primerica, Osaic circumvents the process of developing talent by “taking unfair advantage of prior work” by other companies, and entices reps to break contracts with employers by providing “large cash bounty payments” under the auspices of “forgivable loans.”
“In effect, Osaic pays representatives a lucrative bounty to reward them for taking other firms’ business and misappropriating it for Osaic,” the complaint read, claiming Osaic “locks in” the reps by claiming the “loans” will be forgiven if the rep remains at Osaic (and allegedly moves business from the prior firm to Osaic).
Osaic declined to comment, citing a policy not to speak about ongoing litigation.
Primerica seeks a preliminary injunction in advance of a potential trial that could result in Primerica being awarded damages. Primerica claimed that without a restraining order on Osaic and their former reps, the firm could suffer “irreparable harm.”
