According to the California Court of Appeal, Metropolitan West Asset Management LLC indeed does not have to pay a solicitor it hired to bring in clients for its business. The ruling affirms the trial court’s summary judgment that favored the advisory firm on the grounds that the plaintiff Bruce Lloyd had failed to comply with the Cash Solicitation rule, which would make paying him unlawful.
Metropolitan West Asset Management is registered under the 1940 Investment Advisers Act and Securities and Exchange Commission rules, which mandate that those that solicit clients for investment advisers who are subject to the Act must make certain disclosures. The Cash Solicitation Rule generally requires for solicitors to give prospective clients two disclosure forms: Part 2 of SEC Form ADV and a second one that asks for information about the solicitor, his/her relationship to the investment advisory form, the compensation amount, and any extra charges that the client has to pay.
The agreement, which was signed between Metro and Lloyd was signed in March 2005, generally did not prove successful. The solicitor later proceeded to sue the investment advisory firm for not continuing to pay him a monthly retainer after 2006 and refusing to pay him a referral fee for bringing in business from Pictet & Cie to Metro, which is a Swiss financial firm.
The trial court ruled in Metro’s favor. Now, after turning down numerous arguments made by Lloyd over the cash solicitation rule, so has the California appeals court.
Contact our securities fraud law firm today to request your free case evaluation.
Calif. Court Affirms Ruling For Advisory Firm in Solicitor Fee Dispute, Bloomberg/BNA, January 15, 2013
More Blog Posts:
CFTC Director Says Corporate Compliance Employees Should Have Comprehension of Dodd-Frank Whistleblower Requirements’Anti-Retaliation Provisions, Institutional Investor Securities Blog, June 14, 2012
Whistleblower Sues SEC and FBI for Documents Into Commission’s Probe of Sempra Energy, Stockbroker Fraud Blog, May 22, 2012
JPMorgan CEO Jamie Dimon Blames Regulators for Problems in the Wake of Economic Crisis, Institutional Investor Securities Blog, January 23, 2013