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Adviser Loses Job Following Weekend Client Raid

An arbitration has been filed accusing Oppenheimer & Co. of overstepping its bounds during a three day weekend earlier in the summer during which it mounted a massive client raid. Industry experts claim that this is fairly common. However, details of the raids rarely become public, at least in part because of an industry agreement designed to reduce litigation that regulates broker job-hopping. The details in this matter, however, are quite telling.

On the Friday before Memorial Day, Steven Savoy, at the time an investment adviser with Euro Pacific Capital, wrote a brief note to his CEO stating that he was resigning, effective immediately. Euro Pacific contends that this note was sent from inside an Oppenheimer officer in Saddle Brook, New Jersey, initiating a plan that had been in the works for weeks. Euro Pacific further claims that Savoy had left with confidential client lists that he and his new boss used to contact numerous people over the holiday weekend. Letters announcing Savoy's move, with tabbed and highlighted account-transfer forms, allegedly sat ready for FedEx delivery.

Euro Pacific complained to Oppenheimer, who fired Savoy before he could collected a signing bonus of over $250,000. Rather than having a new job at a bigger firm, he is now out of the industry entirely.

Euro Pacific complaint filed with FINRA claims that the solicitations cost it more than $10 million in funds under management. The firm asks for $40 million in restitution from Oppenheimer. Euro Pacific has also requested an injunction that Oppenheimer and Savoy stop soliciting its customers until the matter is resolved. The court complaint accuses Oppenheimer of slander, conspiracy, unjust enrichment, and theft of trade secrets. Oppenheimer claims that it never possessed Euro Pacific data.

Oppenheimer contends that Euro Pacific's claims are without merit and that Savoy represented to them that he had no contractual obligations restricting his move to the new firm.

Euro Pacific did not learn that Savoy had left until the Tuesday morning following Memorial Day, according to emails filed with FINRA. At that point, Euro Pacific claims that Oppenheimer and Savoy had already contacted "possibly over a hundred" customers via telephone, email, or FedEx packages with signature ready transfer forms.

After being fired from Oppenheimer, Savoy has hired an attorney to fight Oppenheimer's accusation that he misrepresented the terms of his Euro Pacific employment and conned Oppenheimer into hiring him.