National Retirement Partners Inc. (NRP) has been ordered to pay a $2 million arbitration award to two former brokers who NRP terminated after it bought their practices.
Jeffrey Brain Bafs and Wade Alan Walker left Merrill Lynch in 2008 to become affiliated with NRP. The advisers had 150 to 200 retirement plan clients at their practice before the move.
NRP claimed that advisers breached their transition agreement, and it accused the pair of breach of contract and fiduciary duty, promissory fraud, intentional misrepresentation and intentional interference with contract.
The FINRA panel dismissed NRP’s claims, stating they were frivolous and in bad faith. The panel awarded the two advisers on their counterclaim $2 million.
The advisers claimed that they were “set up for failure” when NRP made it impossible to bring their clients over and that NRP’s refusal to support the practice due to the broker-dealer’s “financial-liquidity issues” ensured the collapse of the advisers’ practice.
LPL recently announced that it is acquiring the assets of NRP.