Macquarie Group has settled a legal dispute involving two of its former employees who allegedly failed to comply with post-employment obligations after departing for rival firm UBS Wealth Management.
Macquarie began legal proceedings and sought damages, equitable compensation and a restraining order against Macquarie Private Wealth private client advisers Mark Minchin and Peter Simpson in March.
Minutes handed down in the New South Wales Supreme Court ordered the defendants to “provide access in a manner acceptable to the plaintiff” to several memory storage devices, any personal computer belonging to either defendant and any CDs or DVDs created by either defendant between 22 and 24 December 2008.
“The proceedings have now been resolved by agreement between the parties, with the specific terms of the settlement remaining confidential,” an internal Macquarie communication said.
Previously in the court proceedings, Macquarie alleged the advisers did not comply with their post-employment obligations, specifically those relating to the non-solicitation of clients and employees and taking confidential information, the internal communication said.
The allegations were based on evidence that Macquarie had obtained, including wrap forms that were signed by the advisers transferring Macquarie clients to the new institution during the non-solicitation period.
An internal communication circulated to advisers said if an adviser breached their non-solicitation obligation and a client left, Macquarie would have been deprived of the opportunity to reassign that client to one of its other advisers in the banking and financial services division.
“There is no question that this causes us a loss to our business. Accordingly, the legal proceedings were a necessary step and one we would not hesitate to take again,” it said.
A communication to brokers said Macquarie expects all employees to comply with the terms of their employment agreements, including those relating to post-employment obligations, and the company would take “all necessary steps to protect its business – specifically, its client relationships”.
While adviser turnover is not an unusual occurrence, Macquarie commencing court action against a former adviser is.
“Normally, if advisers attempt to move our clients to another broking house, we write to the advisers and remind them of their obligations under their employment agreements,” the communication to brokers said.
UBS was not party to the proceedings or settlement of the case and the advisers remain employed with UBS Wealth Management, a UBS spokesperson said.
