German banking giant Deutsche Bank has reportedly sued a group of its former wealth management executives to block them from joining rival HPM Partners, a New York-based investment adviser.
The bank filed the lawsuit in Manhattan State Court alleging that HPM coaxed over a dozen of its executives from asset and wealth-management division to divert Deutsche Bank’s key clients to HPM, Bloomberg has reported.
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"The unlawful actions by HPM and the employee defendants could best be described as an economic coup d’etat, which seeks to obtain DB’s critical client base as its spoils," the bank said in its lawsuit.
As per the company policy, US employees at vice president level and above are liable to serve a notice from 30 to 90 days before joining new jobs, besides refraining them to solicit customers for an additional 120 days.
However, the former employees who left earlier this month have already begun contacting clients, Deutsche Bank claimed.
Further, the German bank claimed the hiring also violated the 2012 settlement between the companies, after HPM recruited four former Deutsche Bank managing directors who took away business of more than US$550 million in assets.
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By GlobalDataHowever, the sued wealth managers including Benjamin Pace and Lawrence Weissman have filed a counter-suit in the same court stating that they were forced to leave the firm, which pressed the managers to sell the bank’s high-margin, proprietary products, against their customers’ best interest.
Deutsche Bank spokeswoman Renee Calabro told the news agency, "Deutsche Asset and Wealth Management’s first priority is to fulfill fiduciary duties owed to clients and we reject the claims made in this complaint."
