Close Close
Sign In
Newsletters
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards
Podcast Center Video Center Webcasts Resource Center Events
About ThinkAdvisor Contact Us Advertise With Us Asset & Logo Licensing Sitemap Terms of Service Privacy Policy Copyright © 2024 ALM Global, LLC. All Rights Reserved.
ThinkAdvisor
Image of justice, with a statue holding two scales next to a chess board

Regulation and Compliance > Litigation

Creative Planning, Schwab Prevail in Anticompetitive Conduct Suit

By Melanie Waddell

X
Your article was successfully shared with the contacts you provided.

What You Need to Know

  • A federal judge has dismissed a lawsuit against Creative Planning, Charles Schwab, Fidelity and other firms.
  • The suit claimed 13 firms engaged in wide-ranging unfair and anticompetitive practices and schemes.
  • The judge found the allegations of conspiracy heavy on theories and light on details.

A federal judge has dismissed a lawsuit against Creative Planning, Charles Schwab, Fidelity and other firms that alleged they engaged in wide-ranging unfair and anticompetitive practices and schemes.

Judge LaShonda Hunt dismissed on Sept. 9 a 15-count lawsuit brought by Stephen Albert Greco and Spotlight Asset Group that alleged the 13 firms engaged in wide-ranging unfair and anticompetitive practices and schemes.

Greco reported their conduct to the Securities and Exchange Commission as well as to the Justice Department, and alleged that the firms attempted to silence him and retaliate by interfering with his business.

“The bottom line is that the allegations of conspiracy are heavy on theories and labels and light on details,” Hunt wrote.

“Furthermore, even reading the conspiracy-based claims in the light most favorable to Plaintiffs, they lack adequate factual content about Defendants’ conduct to infer the existence of any agreement to engage in the schemes” alleged by Greco and Spotlight, Hunt wrote.

Hunt granted the firms’ motion to dismiss the suit but said that Greco and Spotlight may file a proposed amended complaint by Oct. 4.

Greco was employed by Creative Planning as its national director of wealth management from September 2013 through March 2017.

According to the suit, based on Greco’s years of experience in the industry and firsthand involvement in Creative Planning’s operations, he came to believe that some of the company’s practices were in violation of federal laws and regulations.

“Specifically, Greco became concerned that certain client referral programs, purported collusive agreements, asset management, trading, and other related practices created direct conflicts of interest and caused breaches of fiduciary duties owed to clients,” the lawsuit states.

Greco resigned from Creative Planning in 2017. In anticipation of leaving Creative Planning, Greco opened and began operating his own RIA, Spotlight, the suit states.

According to Greco, the 13 firms, which included TD Ameritrade, were involved in three illegal schemes: the “CP Fraudulent Growth Scheme,” the “RIA Services Scheme,” and the “Silencing and Retaliation Scheme.”

As a result of all these purported schemes, Greco claimed to have suffered injuries “in the form of being unable to recruit from the IAR labor market and lost clients, which resulted in decreased AUM and stifled growth,” the suit states.

“Still, from 2017 to 2020, Plaintiffs’ allegations tend to show that Spotlight experienced overall growth and success as an RIA,” according to Hunt’s ruling.

Credit: Chris Nicholls/Adobe Stock

Melanie Waddell

@Think_MelanieW

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.