A mega-team of financial advisors was sued by Merrill Lynch after they left the wirehouse, where they oversaw about $129 billion in client assets, to launch their new registered investment advisory firm, OpenArc Corporate Advisory.

The lawsuit, which also names Charles Schwab, which provided OpenArc with custody services, and Dynasty Financial Partners, alleges the advisors and firms participated in a “pre-meditated corporate raid” to gain Merrill’s book of business, including its clients that were affiliated with the team when they were at Merrill.  

OpenArc, which secured a strategic capital investment from Dynasty, offers institutional consulting, “executive” financial planning, educational resources, and wealth management to high-net-worth individuals, families, and businesses.  

Additionally, Dynasty has taken a minority equity stake in OpenArc, and Shirl Penney, Dynasty’s CEO and founder, has joined the firm’s board of directors. 

OpenArc’s managing partners include Emily Fletcher, Kevin Higginbotham, Erik Bjerke, Jeffrey Crowell, and James Kaufman, according to the Securities and Exchange Commission’s Investment Adviser Public Disclosure website.  

“Dynasty takes the protocol for broker recruitment very seriously.  We are also strong advocates for advisor and client choice and believe that leadership by fear is not a long-term strategy on how to retain the best advisors and serve their clients over time.  Fear will not dictate the actions of the most independent minded advisors who seek the best outcome for their clients, teams, and their families,” a Dynasty spokesperson said to Connect Money. 

Dynasty further states that its firm “focus remains on delivering modern technology, flexible platforms, better economics, and world class services” to its clients. 

Merrill also claimed that with coordination from Dynasty and Schwab, OpenArc used “scare tactics” to swipe employees from its Atlanta-based Global Corporate & Institutional Advisory Services team, which includes spreading rumors that “Merrill Lynch would shut down GCIAS and terminate any junior level employee who remained behind,” the lawsuit said. 

Merrill is actively seeking a temporary restraining order and an injunction halting the advisors and firms from soliciting or further contacting Merrill clients. 

Recently, the team at OpenArc countered Merrill’s claims, stating in a separate filing that Merrill “secretly devised a plan to unfairly compete, deliberately harm their reputations and drag them through the mud in the press.”