Charlotte wealth adviser poached ultra-rich clients from Vanguard, lawsuit claims
Global investment firm Vanguard is suing a Charlotte-based wealth adviser for poaching ultra-rich clients, a recent federal court complaint alleges.
Local financial adviser Matthew Snipes, a Matthews resident, spent his career working for Vanguard, ultimately serving as one of its most senior wealth advisers, the lawsuit said.
But in April, company lawyers alleged in the complaint, Snipes abruptly left his job and used “confidential information and trade secrets” to “improperly solicit” his wealthy Vanguard clients to his new firm, Topsail Wealth Management.
Vanguard filed suit June 9 in the Western District of North Carolina seeking monetary damages from Snipes and Topsail.
Matthew DeAntonio, the attorney representing Snipes and Topsail, declined a request for comment from The Charlotte Observer on Friday.
Not ‘a single prospect’
Snipes got a job at the company in 2006, the year he graduated from the University of South Carolina, according to his LinkedIn page.
During that time, he rose from an entry-level job to the company’s most senior client-facing position, an “ultra high net worth senior financial adviser,” according to the court filing.
Snipes earned “hundreds of thousands of dollars” annually, the complaint said, and served as the primary investment manager for clients who had at least $15 million invested with Vanguard.
Spending on client visits
In the summer of 2020, Snipes agreed to a “transition payment agreement” with Vanguard, according to the company’s court documents.
According to the complaint, the agreement stated that Snipes would receive two cash payments in June 2022 and June 2023, as long as he agreed to provide Vanguard with 60 days’ notice if he intended to resign. The payments would total $40,042, the filing said.
The agreement also stated that Snipes couldn’t solicit Vanguard clients or prospects for one year following his employment with the company, the lawsuit stated.
On April 22, 2022, Snipes abruptly left the company, the complaint said, resigning immediately. Vanguard later learned that Snipes had started recruiting clients for his own business while still an employee, the lawsuit alleged.
Between January and April, Snipes expensed $23,000 in travel and client entertainment costs, Vanguard’s lawyers claimed. That was 10 times higher than the average charged by colleagues in the same role over the same period, Vanguard alleged.
Snipes visited about 40 Vanguard clients at the company’s expense in the months leading up to his resignation, the company claimed.
Vanguard said it learned of his efforts to recruit clients for Topsail via an investor email the firm believes was erroneously sent to Snipes’ Vanguard address.
Just over a month after resigning from Vanguard, Snipes registered and established Topsail Wealth Management, LLC, with the N.C. Secretary of State, the lawsuit said.
Breaches of contract claims
By leaving to start his own company and planning to bring Vanguard clients with him, Snipes breached legally enforceable agreements he’d made with his former employer, the complaint said, including his transition payment agreement.
At least five clients told Vanguard that they’re thinking of taking their business to Snipes’ new firm, the lawsuit said, and there are three more the company thinks are at risk of doing so.
One client is already transferring their $26 million worth of assets to Topsail,Vanguard lawyers said.
Vanguard is seeking compensatory, punitive and exemplary damages, as well as compensation for legal costs.
This story was originally published June 21, 2022 at 6:00 AM with the headline "Charlotte wealth adviser poached ultra-rich clients from Vanguard, lawsuit claims."
