Prime Capital Responds to Edelman Restraining Order
Last week, Edelman Financial Engines filed for a temporary restraining order against Prime Capital Financial, claiming the firm had poached two more Edelman planners and encouraged them to breach their employment contracts. Prime Capital filed an opposition to the TRO request this week, arguing that the court lacks the jurisdiction to issue it and that Edelman will not suffer irreparable harm if it’s not granted.
The response is the latest volley in a federal suit that began last November, in which Edelman sued Prime Capital and accused the competitor of “a coordinated and concealed scheme to pillage” the firm by stealing Edelman’s client information.
The restraining order concerns Joan Greenspon and Amanda Salyer, two former Edelman advisors who managed over 650 clients $550 million in assets in Edelman’s West Conshohocken, Pa., offices. According to Edelman, Prime Capital recruited the two advisors who followed “Prime Capital’s playbook to the tee.”
In its response, Prime Capital argues that the TRO improperly expands the complaint by adding claims against Salyer and Greenspon, who are not named as defendants.
Prime Capital stated that Edelman has not proven it will suffer irreparable harm if the TRO is not granted, arguing that the alleged injuries can be adequately compensated by monetary damages and that Salyer did not take any confidential client information. Further, the firm argued that Edelman would have sought injunctive relief in the three months since filing the complaint if there was an urgency.
The RIA further claims it has a legitimate right to compete.
“PCIA is entitled to compete lawfully for clients and advisors in the marketplace,” the opposition said. “Which is exactly what it has done. And as discussed above, EFE has not plausibly alleged, except in a conclusory manner, any unlawful conduct by PCIA with respect to Greenspon and Salyer.”
“By filing its motion, EFE is attempting to prevent two financial advisors in the state of Pennsylvania from exercising their right as at-will employees to resign and seek employment with a new employer,” Prime Capital’s response stated.
A spokeswoman for Edelman declined to comment.
Edelman’s legal squabbles with Prime Capital extend back to last February, when it added the latter firm as a defendant in three ongoing suits concerning former Edelman advisors who left for Prime Capital. After Edelman directly sued Prime Capital last November, the latter firm moved to pause the suit, claiming the issues were already being addressed in the three lawsuits and ongoing arbitration claims (the Delaware federal court judge overseeing the case has not yet ruled on Prime Capital’s motion to stay).