Dynasty, BofA Reach Agreement Over Lawsuit

Wendy Connett

25 January 2011

Dynasty Financial Partners has reached an agreement to settle a lawsuit Bank of America filed against the firm. Michael Brown joined the start-up as partner and director of wealth management from US Trust, BofA’s private banking arm. Brown's team, who also joined, managed $5.9 billion in assets, according to a Barron's 2009 survey.

Dynasty launched in December. Shortly after BofA filed the lawsuit alleging breach of contract by the former US Trust advisors.

In the lawsuit BofA said the defendants violated their employment contracts and sought a temporary injunction and the return of client lists and other property. The bank also asked that the defendants be banned from soliciting any US Trust clients for six months and sought an undisclosed amount in monetary damages.

The defendants countered that they were protected by the Protocol for Broker Recruiting, which allowed them to take some information to Dynasty, to which neither BofA or US Trust were signatories. Merrill Lynch, its brokerage unit, however, was a signatory.

BofA argued that the defendants could not invoke the protection as they were not employees of Merrill Lynch and were under US Trust.

In a statement Dynasty said it had resolved all issues related to the departure of Brown and certain members of his team.

Terms of the agreement were not disclosed.

“We are very satisfied with the terms of the agreement with Bank of America, and we are pleased that we have been able to resolve these issues amicably,” Shirl Penney, president and chief executive of Dynasty said in a statement.