Preview
Date Filed 5/22/2024 12:02 PM
Superior Court - Worcester
Docket Numb
é-Filea
COMMONWEALTH OF MASSACHUSETTS
WORCESTER, SS WORCESTER SUPERIOR COURT
CIVIL ACTION NO. AAS TCVST% B
GRIMES & COMPANY, INC.
Plaintiff,
VERIFIED COMPLAINT AND
Vv. DEMAND FOR PRELIMINARY AND
PERMANENT EQUITABLE RELIEF
BRIAN G. CARLSON.,
Defendant.
INTRODUCTION
This is an action brought by the Plaintiff, Grimes & Company, Inc. (“Grimes & Co.” or
the “Company”), against its former employee, Defendant Brian G. Carlson (“Deéfendant” or “Mr.
Carlson”), for breach of contract. Mr. Carlson has breached restrictive covenants set forth ina
Confidentiality and Restrictive Covenant Agreement (the “Agreement”) he signed during his
employment with Grimes & Co. As a direct of Defendant’s wrongful conduct, Grimes & Co.
has lost business and is at great risk of an erosion of its customer base. By this action, Grimes & .
Co. seeks preliminary and permanent equitable relief to prevent further irreparable harm.
Grimes & Co. also seeks an award of monetary damages against Defendant for the harm it has
already suffered.
THE PARTIES
1 The Plaintiff, Grimes & Co., is a Massachusetts domestic corporation with a
principal place of business in Westborough, Worcester County, Massachusetts.
2 The Defendant, Brian G. Carlson, an individual, is a New York resident, residing
at 12 Ambergate Rise, Pittsford, NY 14534.
Date Filed 5/22/2024 12:02 PM
Superior Court - Worcester
Docket Number
JURISDICTION
v
3 Mr. Carlson consented to the personal jurisdiction and venue of this Court
pursuant to Section 13 of the Agreement.
4 Section 13 of the Agreement states, in relevant part:
To the extent not inconsistent with applicable law, I acknowledge and agree
that this Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Massachusetts, and the venue (i.e.,
location) for the resolution of any dispute or controversy shall be the County
of Worcester, Commonwealth of Massachusetts.
A true and genuine copy of the Agreement is attached to this Verified Complaint as
Exhibit A.
FACTUAL ALLEGATIONS
Grimes & Co.
5 Grimes & Co. is a Registered Investment Advisor (“RIA”) providing
discretionary portfolio management and wealth management services for clients across the
country. Grimes & Co.’s mission is to provide its clients with disciplined asset management,
strong performance, and unparalleled service and support.
6 As an RIA, Grimes & Co. maintains a contractual relationship with promoting
firms including Fidelity Investments (“Fidelity”) and Charles Schwab (“Schwab”). As part of
these contractual arrangements, Fidelity and Schwab may refer their investor clients who express
aneed and/or interest in securing professional portfolio management and wealth management
services to Grimes & Co. Absent the contractual relationships Grimes & Co. has with Fidelity &
Schwab, Fidelity & Schwab would not refer their clients to Grimes & Co.
7. When Grimes & Co. receives a client referral from Fidelity or Schwab, it then
presents its services and a proposal to the client to retain Grimes & Co.’s discretionary portfolio
management and wealth management services.
4882-2570-2333, v. 1
Date Filed 5/22/2024 12:02 PM
Superior Court - Worcester
Docket Number
8 Approximately half of the clients Grimes & Co. services are referred by Fidelity
and Schwab. Most of the remaining clients Grimes & Co. services are referred by existing
Grimes & Co. clients.
9 The identity of Grimes & Co.’s clients is not public knowledge. Indeed, only a
limited number of individuals know who among the general public are Grimes & Co. clients who
have demonstrated a specific need and desire for the services Grimes & Co. provides.
Grimes & Co.’s Client Goodwill and Confidential Information
10. Grimes & Co. invests significant time, effort and resources in the development of
its valuable relationships and the associated goodwill with its clients. It is imperative that
Grimes & Co. keep its client goodwill protected to retain the competitive advantage that it has
developed in its highly competitive industry.
ll. Grimes & Co. has also invested significant time, effort and resources to develop
confidential and proprietary information and processes to secure and maintain its competitive
advantage in its industry.
12. Grimes & Co. has amassed a great deal of confidential and proprietary business
information and trade secrets regarding its investment advisory operations, methods and
practices, including, but not limited to, books, records, lists, computer programs, and other
information or documents regarding the Company’s revenue, business methods, investment
advisory process and practices (which includes financial planning and investment management),
marketing strategies and plans, and referral sources, as well as information pertaining to the
Company’s past, present and prospective clients, including, but not limited to, identity, address,
email address, telephone numbers, telefax numbers, account numbers, investment objectives,
service requirements, and fees charged (collectively, the “Confidential Information”).!
1 The definition of Confidential Information in this Paragraph shares the same meaning as in the Agreement.
3
4882-2570-2333, v. 1
Date Filed 5/22/2024 12:02 PM
Superior Court - Worcester
Docket Number
13. Grimes & Co.’s Confidential Information is highly valuable and provides Grimes
& Co. a distinct competitive advantage provided it is used exclusively by Grimes & Co. and its
employees. Indeed, with respect to Confidential Information concerning a client, no competitor
can effectively target a Grimes & Co. client and address their needs without access to or specific
knowledge of client-related Confidential Information.
14, The knowledge of the Confidential Information if available to or in the possession
of Grimes & Co.’s competitors would be highly detrimental to Grimes & Co.’s ability to
maintain its client relationships and revenue derived from those clients. Indeed, with knowledge
of the identity of a Grimes & Co. client, a competitor could intentionally target the client and
solicit their business.
15. Grimes & Co. undertakes a comprehensive, consistent and effective approach to
protecting its Confidential Information. This includes but is not limited to consistent messaging
to employees regarding the importance of confidentiality in offer letters, employment agreements
(such as the Agreement), and training.
16. In addition, Grimes & Co. has adopted (i) a comprehensive privacy policy
outlining how the Company protects the confidentiality of client information, and (ii) a written
information security policy to ensure all client information in Grimes & Co.’s possession
remains strictly confidential, and is accessed only by those employees at the Company who have
a legitimate need-to-know.
17. The Company also uses computer passwords and multi-factor authentication to
protect against unauthorized access to Confidential Information. Moreover, the Company sets
access restrictions applicable to its own employees to ensure that employees are only permitted
access to Confidential Information, including client-related information, which they need to
perform their job functions.
4882-2570-2333, v. 1
Date Filed 5/22/2024 12:02 PM
‘Superior Court - Worcester
Docket Number
Mr. Carlson’s Employment with Grimes & Co.
18. Mr. Carlson began his employment with Grimes & Co. on March 14, 2016. Prior
to the start of his employment, and in consideration of his employment with the Company, Mr.
Carlson executed a Confidentiality and Restrictive Covenant Agreement (the “2016 Agreement”)
containing, among other provisions, restrictive covenants governing his conduct both during and
after his employment with the Company.
19. During his employment with Grimes & Co., Mr. Carlson held the position of
Financial Advisor.
20. At the time of his hire and until in or about July 2020, Mr. Carlson lived in
Westborough, Massachusetts. During that timeframe, Mr. Carlson spent the majority of his time
physically working out of the Company’s office in Westborough, Massachusetts. In or about
July 2020, Mr. Carlson moved to Pittsford, New York, where he worked remotely for Grimes &
—
Co. '
21. As part of his job duties and responsibilities as a Financial Advisor, Mr. Carlson
had access to and used Grimes & Co.’s Confidential Information in the performance of his job
duties. In particular, as it relates to Grimes & Co.’s clients, Mr. Carlson was privy to their
identity, address, email address, telephone numbers, telefax numbers, account numbers,
investment objectives, service requirements, and the fees Grimes & Co. charged.
22. In his position with Grimes & Co., Mr. Carlson was responsible for assisting
Grimes & Co.’s clients in identifying financial goals and working with Grimes & Co.’s portfolio
management team to design investment allocations and determine strategy selections to meet
clients’ needs.
4882-2570-2333, v. 1
Date Filed 5/22/2024 12:02 PM
Superior Court - Worcester
Docket Number
23. Mr. Carlson would regularly speak with Grimes & Co.’s clients over the phone,
via videoconference, through email, or in-person.
24, As part of his job, Mr. Carlson would interview clients to determine current
income, expenses, insurance coverage, tax status, financial objectives, risk tolerance, and other
suitable information needed to develop a financial plan and investment policy statement.
25. / Mr. Carlson was also expected to consult with clients about their financial
allocations and investment strategies as they evolve over time, and to contact clients periodically
to determine any changes in their financial status.
26. Mr. Carlson was responsible for interactions with clients to ensure satisfaction
and maintain favorable relations. Mr. Carlson was also responsible for managing ongoing client
relationships. -
27. During his employment and with the support and investment provided by Grimes
& Co., Mr. Carlson continued to develop Grimes & Co.’s goodwill with its clients.
28. Approximately 90-95% of the clients with whom Mr. Carlson worked at Grimes
& Co. were referred to Grimes & Co. by Fidelity and Schwab. Most of the remaining clients
with whom Mr. Carlson worked were referred to Grimes & Co. by other Grimes & Co. clients or
assigned to Mr. Carlson by the Company. Mr. Carlson did not develop these clients through his
own contacts or leads.
29. At least thirteen of the clients Mr. Carlson serviced while working for Grimes &
Company were located in Massachusetts.
Mr. Carlson Executes the Agreement
30. As part of Grimes & Co.’s contractual arrangement with Schwab, Schwab _
required Grimes & Co. to ensure that all of its employees who work with clients referred by
Schwab abide by certain policies, including confidentiality and non-solicitation restrictions.
4882-2570-2333, v. 1
Date Filed 5/22/2024 12:02 PM
‘Superior Court - Worcester
Docket Number
31. Consistent with Schwab’s requirement, in May 2023, Grimes & Co. provided
those of its employees who desired to continue to receive client referrals from Schwab with an
updated confidentiality and restrictive covenant agreement attaching a copy of the Schwab
Advisor Network Contact Policy.
32. Grimes & Co. presented Mr. Carlson with the Agreement to review.
33. On May 31, 2023, in consideration of his continued employment and the ability to
continue to receive client referrals from Schwab, Mr. Carlson executed the Agreement. If Mr.
Carlson had not executed the Agreement, he would not have been permitted to continue to
receive client referrals from Schwab. The Agreement superseded the 2016 Agreement.
34, The Agreement outlined Mr. Carlson’s obligations both during and after his
employment.
35. Section 2 of the Agreement expressly provides:
During the term of my employment/association, and forever thereafter (regardless
of the circumstances surrounding termination), I agree not to use, communicate.
reveal or otherwise make available such Confidential Information for any purpose
whatsoever, nor will I divulge (or cause to be divulged) any such Confidential
Information to any person, partnership, corporation or entity other than the
Company except: (i) in furtherance of my employment duties to the Company: (ii)
as required to testify truthfully before, or otherwise assist in any investigation or
proceeding brought by the U.S. Securities and Exchange Commission, any state or
federal regulatory body, or any law enforcement agency or other legislative body;
or (iii) to the U.S. Securities and Exchange Commission about a possible securities
violation in conformity with the “Whistleblower Regulations” under Section 21F
of the Securities Exchange Act of 1934 including all related rules and provisions.
Except with respect to the “Whistleblower Regulations,” upon termination of my
employment, or at any other time that the Company may so request, I shall
immediately deliver to the Company all such Confidential Information, including,
but not limited to, all papers, notes, lists, computer programs, reports, books,
records and all other documents (and all copies thereof) relating to the Company as
made reference to above, which I may then possess or have under my control. The
above restrictions apply to all Confidential Information regardless of the format in
which it is created or maintained (hard copy, electronic, or otherwise), or where it
is maintained, including, but not limited to, all computer(s) that you may possess
or have access to away from the Company’s offices.
The foregoing language is referred to herein as the “Confidentiality Clause.”
7
4882-2570-2333, v. 1
Date Filed 5/22/2024 12:02 PM
Superior Court - Worcester
Docket Number
36. Section 6 of the Agreement expressly provides:
In recognition of the highly confidential and proprietary nature of the Company’s
business methods and practices, I, during my employment/association with the
Company, and for a period of twenty-four (24) months subsequent to termination
of my employment/association for any reason (regardless of the circumstances
surrounding termination), shall not, directly or indirectly, in any manner
whatsoever:
@) neither solicit to render, nor render or accept, as a principal, agent,
employee, consultant, stockholder, partner, member, officer, director or in any
other capacity, for the benefit of any person or entity other than the Company, any
investment advisory (i.e., investment management, financial planning, and related
consulting services) or securities and insurance sales or brokerage (including the
sale of any investment or insurance product) business from/to (i) any person or
entity who is a client (exclusive of family members) of the Company at the
inception of my employment/association, or becomes a client of the Company
during the term of my employment association, unless otherwise specifically
excluded and set forth on an annexed Schedule “A” (which may be amended from
time-to-time in writing), which Schedule “A” must be executed and dated by both
the Company and me to be effective... In the event that the Company provides
services to and/or through investment advisors, broker-dealers, or any other
financial services provider (and/or directly or indirectly to any clients of such
investment advisors, broker-dealers, etc.), the restrictions pertaining to the term
“client” as used in this subparagraph 6a) shall also apply to all such entities...
The foregoing language is referred to herein as the “Non-Solicitation Clause.”
37. On March 1, 2024, Grimes & Co. terminated Mr. Carlson’s employment. Upon
his termination of employment, Grimes & Co. sent Mr. Carlson a copy of the Agreement and
reminded him of his post-employment obligations to the Company, including the Confidentiality
Clause and the Non-Solicitation Clause.
38. Grimes & Co. performed all of its obligations owed to Mr. Carlson during his
employment and as part of the Agreement.
Mr. Carlson’s Affiliation with Advisors Capital Management, LLC
39. On or about April 9, 2024, Grimes & Co. learned that Mr. Carlson became
affiliated with the wealth management team of Advisors Capital Management, LLC (“ACM”).
Mr. Carlson’s title with ACM is “Senior Wealth Advisor.”
8
4882-2570-2333, v. 1
Date Filed 5/22/2024 12:02 PM
Superior Court - Worcester
Docket Number
40. ACM is a competitor to Grimes & Co.
41. Mr. Carlson’s biography on ACM’s website states:
Brian G. Carlson, CFP® is a Senior Wealth Advisor with ACM Wealth. He works
with clients to create customized financial plans that align with their actively
managed portfolios to achieve their long-term goals. As a CERTIFIED
FINANCIAL PLANNER™ practitioner, Brian focuses on developing a
comprehensive holistic financial plan for each client and implementing tailored
investment strategies. Brian enjoys building meaningful relationships to better
serve as a fiduciary and address the specific needs of each client. Prior to joining
ACM in April 2024, Brian. guided over 150 families as a financial advisor from
2016-2024 at Grimes & Company, a nationally ranked RIA. (Emphasis added).
A true and genuine copy of Mr. Carlson’s biography on ACM’s website is attached to this
t
Verified Complaint as Exhibit B.
42. As described in the above biography, Mr. Carlson’s job duties and responsibilities
as a Senior Wealth Advisor with ACM very closely align with his job duties and responsibilities
as a Financial Advisor for Grimes & Company.
43. Grimes & Co.’s Confidential Information, including information concerning
Grimes & Co.’s clients, is being wrongfully used by Mr. Carlson in the performance of his
activities on behalf of ACM.
44. Since his employment with Grimes ended, Mr. Carlson has, on behalf of ACM,
solicited business from Grimes & Co. clients with whom he directly worked while employed by
Grimes & Co.
45. Mr. Carlson’s solicitations have caused at least one Grimes & Co. client with
whom he directly worked while employed by Grimes & Co. to transfer their business to him at
ACM.
Mr. Carlson’s Solicitations and Use of Confidential Information
Client M.P.?
? To protect the privacy of the individuals in question, initials are being used for identification purposes.
9
4882-2570-2333, v. 1
Date Filed 5/22/2024 12:02 PM
‘Superior Court - Worcester
Docket Number
46. M_P. became a Grimes & Co. client on or about May 5, 2020. M.P. was referred
to Grimes & Co. by an existing Grimes & Co. client. Mr. Carlson provided investment advisory
and wealth planning services to M.P. during his employment with Grimes. Only by servicing
MP. on behalf of Grimes & Co. did Mr. Carlson become aware of M.P. and the fact they were
interested in investment advisory services and wealth planning services.
47. On Tuesday, April 9, 2024, after Mr. Carlson’s employment with Grimes ended,
M_.P. met with Grimes & Co. employee Cody Forbush (“Mr. Forbush”) to review M.P.’s
accounts and discuss that he would be the Grimes & Co. representative servicing M.P.’s account
moving forward.
48. On Thursday, April 11, 2024, Mr. Forbush sent M.P. an email following-up from
their meeting on April 9. A true and genuine copy of the email is attached to this Verified
Complaint as Exhibit C.
49. MP. did not respond to Mr. Forbush’s April 9 email. As a result, Mr. Forbush
sent another email to M.P. on April 23, 2024. Exhibit C.
50. MP. responded to Mr. Forbush on April 24, 2024, writing:
Cody,
I reached out to Brian Carlson when I heard he was no longer with Grimes. We had
developed a good working relationship over the last 4 years that I value. In addition,
his new company looks to have more frequent and more understandable
communication both written and recorded podcast.
If they have not received it yet, Grimes will be receiving the required documentation
for the change. I appreciated the more measured and balanced approach of Grimes
investing. Not as much run up in good market times, but not as much downfall when
the market is not doing so well.
Thanks and best wishes.
MP.
Exhibit C.
10
4882-2570-2333, v. 1
Date Filed 5/22/2024 12:02 PM
‘Superior Court - Worcester
Docket Number
51. On April 25, 2024, M.P. sent an email to Mr. Forbush stating:
Brian,
Here is the correspondence we just discussed. Note his initial email asking me to make a
follow up appointment.
Exhibit C.
52. Upon information and belief, M.P. intended to send the foregoing email to Mr.
Carlson, but mistakenly sent the email to Mr. Forbush instead. M.P. then sent another email to
Mr. Forbush on April 25, 2024, stating: “My apologies for sending you this message.”
Exhibit C.
53. M_P. is no longer a client of Grimes & Co.
54. Mr. Carlson solicited M.P. on behalf of ACM to provide investment advisory
services in violation of the Agreement. Due to Mr. Carlson’s solicitation, M.P. transferred their
business from Grimes & Co. to Mr. Carlson at ACM.
55. Mr. Carlson violated the Agreement by using Confidential Information
concerning M.P.’s identity to solicit them.
56. As a result of Mr. Carlson’s violations of the Agreement, Grimes & Co. has lost
business.
Client P.W.
37. P.W. became a Grimes & Co. client on or about March 28, 2019. P.W. was
referred to Grimes & Co. by TD Ameritrade.? Mr. Carlson provided investment advisory and
wealth planning services to P.W. during his employment with Grimes. Only by servicing P.W.
on behalf of Grimes & Co. did Mr. Carlson become aware of M.P. and the fact they were
interested in investment advisory services and wealth planning services.
3 Schwab acquired T.D. Ameritrade in 2020.
11
4882-2570-2333, v. 1
Date Filed 5/22/2024 12:02 PM
‘Superior Court - Worcester
Docket Number
58. On May 7, 2024, Grimes & Co. received notification that P.W. was leaving
Grimes & Co., and that they were going to work with Mr. Carlson at ACM.
59. P.W. is no longer a client of Grimes & Co.
60. Upon information and belief, Mr. Carlson solicited P.W. on behalf of ACM to
provide investment advisory services to them in violation of the Agreement. Upon information
and belief, due to Mr. Carlson’s solicitation, P.W. transferred their business from Grimes & Co.
to Mr. Carlson at ACM.
61. Upon information and belief, Mr. Carlson violated the Agreement by using
Confidential Information concerning P.W.’s identity to solicit them.
62. Upon information and belief, as a result of Mr. Carlson’s violations of the
Agreement, Grimes & Co. has lost business.
Client M.R.
63. MLR. became a Grimes & Co. client on or about September 20, 2022. M.R. was
referred to Grimes by Fidelity. Mr. Carlson provided investment advisory and wealth planning
services to M.R. during his employment with Grimes & Co. Only by servicing M.R. on behalf
of Grimes & Co. did Mr. Carlson become aware of M.R. and the fact they were interested in
investment advisory services and wealth planning services.
64. On March 27, 2024, Grimes & Co. employee Timothy D. Rheaume (“Mr.
Rheaume”) met with M.R. via videoconference. MLR. informed Mr. Rheaume that they were not
concerned with the prior performance of their investments, and liked that their investment
accounts had the flexibility to convert to cash. Based on Mr. Rheaume’s conversation with
M.R., Mr. Rheaume believed that M.R. would be staying with Grimes & Co.
65. However, on May 10, 2024, Grimes & Co. received notification that M.R. was
leaving Grimes & Co. due to account performance.
12
4882-2570-2333, v. 1
Date Filed 5/22/2024 12:02 PM
Superior Court - Worcester
Docket Number
66. MLR. is no longer a Grimes & Co. client.
67. Upon information and belief, Mr. Carlson solicited MR. on behalf of ACM to
provide investment advisory services to them in violation of the Agreement. Upon information
and belief, due to Mr. Carlson’s solicitation, M.R. transferred their business from Grimes & Co.
to Mr. Carlson at ACM.
68. Upon information and belief, Mr. Carlson violated the Agreement by using
Confidential Information concerning M.R.’s identity to solicit them.
69. Upon information and belief, as a result of Mr. Carlson’s violations of the
Agreement, Grimes & Co. has lost business.
Client R.P.
70. R.P. became a Grimes & Co. client on or about August 30, 2022. RP. was
referred to Grimes & Co. by Fidelity. Mr. Carlson provided investment advisory and wealth
planning services to RP. during his employment with Grimes. Only by servicing R.P on behalf
of Grimes & Co. did Mr. Carlson become aware of R.P. and the fact they were interested in
investment advisory services and wealth planning services.
71. On or about May 2, 2024, Mr. Carlson initiated contact with R.P. Mr. Carlson
informed R.P. that he obtained R.P.’s telephone number from R.P.’s son, who Mr. Carlson had
looked up online and called the day before.
72. Mr. Carlson told R.P. that he was calling to catch up on a personal basis, and if
R.P. wanted information on Mr. Carlson’s new firm, ACM, he would provide it. R.P. agreed,
and Mr. Carlson sent them an email shortly thereafter with information about ACM.
2. Mr. Carlson violated the Agreement by soliciting RP. to provide investmerit
advisory services and wealth planning services.
13
4882-2570-2333, v. 1
Date Filed 5/22/2024 12:02 PM
Superior Court - Worcester
Docket Number
74. Mr. Carlson violated the Agreement by using Confidential Information
concerning R.P.’s identity to solicit them.
75. Upon information and belief, Mr. Carlson has solicited additional Grimes & Co.
clients beyond M.P., P.W., M.R. & RP since his employment with Grimes & Co. ended on
March 1, 2024.
Cease and Desist Demand
76. Once it learned of Mr. Carlson’s efforts to solicit Grimes & Co.’s clients with
whom he worked, Grimes & Co. — through its counsel — sent a demand letter to Mr. Carlson
reminding him of his contractual obligations and demanding that he cease and desist from his
wrongful activities. A true and genuine copy of the cease-and-desist demand dated April 30,
2024, is attached to this Verified Complaint as Exhibit D.
77. On the same day, Grimes & Co. — through its counsel — sent a demand letter to
ACM advising ACM of Mr. Carlson’s contractual obligations, and demanding that ACM ensure
7
that Mr. Carlson’s violative conduct cease immediately. A true and genuine copy of the cease-
and-desist demand dated April 30, 2024, is attached to this Verified Complaint as Exhibit E.
78. Mr. Carlson has not discontinued his wrongful conduct.
79. As a result of the wrongful conduct of Mr. Carlson, Grimes & Co. will suffer
irreparable harm if that conduct is permitted to continue.
80. Grimes & Co. has no adequate remedy at law.
COUNTI
Breach Of Contract
(Non-Solicitation Clause)
81. Grimes & Co. re-alleges and incorporates by reference all preceding paragraphs
as if fully alleged herein.
14
4882-2570-2333, v.1
Date Filed 5/22/2024 12:02 PM
Superior Court - Worcester
Docket Number
82. By the conduct set forth herein occurring after the termination of his employment
with Grimes & Co., Mr. Carlson breached the Non-Solicitation Clause in the Agreement.
83. As a direct and proximate result of the aforementioned breaches, Grimes & Co.
has suffered and will suffer harm irreparable harm and monetary damages.
’
COUNT IL
Breach of Contract
(Confidentiality Clause)
84. Grimes & Co. re-alleges and incorporates by reference all preceding paragraphs
as if fully alleged herein.
85. By the conduct set forth herein occurring after the termination of his employment
with Grimes & Co., Mr. Carlson breached the Confidentiality Clause in the Agreement.
86. As a direct and proximate result of the aforementioned breaches, Grimes & Co.
has suffered and will suffer harm irreparable harm and monetary damages.
REQUESTED RELIEF
The Plaintiff respectfully requests that this Court enter the following relief:
PRELIMINARY AND PERMANENT INJUNCTIVE RELIEF
A. That a Preliminary Injunction be entered during the pendency of this matter or
until modified by this Court, and that a Permanent Injunction be entered thereafter restraining
and enjoining Mr. Carlson as follows:
1 Disclosure of Solicitations of Clients. Mr. Carlson is ordered to immediately
disclose all solicitations, conversations, or efforts made by him on his own behalf or on behalf of
ACM, or any other person, business, company, corporation, entity or firm which competes with
Grimes & Co., to divert or take away investment advisory (i.e., investment management,
financial planning, and related consulting services) and/or securities and insurance sales or
brokerage (including the sale of any investment or insurance product) business from any of those
15
4882-2570-2333, v. 1
Date Filed 5/22/2024 12:02 PM
Superior Court - Worcester
Docket Number
clients with whom he worked and/or about whom he acquired Confidential Information during
his employment with Grimes & Co. (hereinafter “Clients”) since March 1, 2024.
2 Discontinue Solicitations of Clients. With respect to any of the Clients, Mr.
Carlson is hereby restrained from contacting or soliciting said Clients, or diverting or attempting
to divert business of said Clients away from Grimes & Co. or otherwise interfering with Grimes
& Co.’s relationship with any of said Clients. This Preliminary Injunction specifically restricts
Mr. Carlson from any further efforts to solicit, divert, or take away investment advisory and/or
securities and insurance sales or brokerage business from any Clients.
3 Disclosure of Acceptance of Business from Clients. Mr. Carlson is ordered to
immediately disclose all investment advisory and/or securities and insurance sales or brokerage
business he or ACM (as a result of Mr. Carlson’s solicitations) has accepted from Clients since
March 1, 2024.
4 Non-Acceptance of Business from Clients. Mr. Carlson, on his own behalf or on
behalf of ACM or any other person, business, company, corporation, entity or firm is hereby
restrained from accepting any investment advisory and/or securities and insurance sales or
brokerage business from any Clients that result from Mr. Carlson’s solicitation in violation of the
Agreement.*
5 Identification of Disclosed Confidential Information. With respect to any
Confidential Information including, but not limited to, information concerning Grimes & Co.’s
clients, disclosed by Mr. Carlson to ACM or any other person, business, company, corporation,
entity or firm, Mr. Carlson is ordered to immediately identify to Grimes & Co. all such
Grimes & Co. is not seeking to enjoin Mr. Carlson from accepting business from Grimes & Co. clients that he
did not solicit to provide investment advisory and/or investment advisory and/or securities and insurance sales or
brokerage business, but who nonetheless contact Mr. Carlson voluntary and without prompting by him or anyone
on his behalf. Moreover, Grimes & Co. is not seeking to enjoin Mr. Carlson from providing services to those
Clients who have already transferred their business to him and ACM. Grimes & Co. will pursue monetary
damages for these transgressions.
16
4882-2570-2333, v. 1
Date Filed 5/22/2024 12:02 PM
Superior Court - Worcester
Docket Number
information disclosed. With respect to this identification, Mr. Carlson must include (a) the
nature of the information, (b) the date of disclosure, (c) the nature of the disclosure, (d) the
purpose of the disclosure, (e) the use made of the information disclosed, and (f) the name and
position of all employees of ACM or any other person, business, company, corporation, entity or
firm which competes with Grimes & Co., to whom such disclosures have-been made.
6 Delivery of Confidential Information. Mr. Carlson is ordered to deliver all
Confidential Information in his possession to Grimes & Co. In conjunction with the delivery of
said Confidential Information, Mr. Carlson shal! make copies to be retained by counsel to be
used solely for the purposes of this litigation.
7 Deletion of Confidential Information. With respectto any Confidential
Information Mr. Carlson may have in his possession, he is ordered to permanently delete said
Confidential Information and certify under oath to this Court that he has done so.
8 Restraint on Disclosure or Use of Confidential Information. Mr. Carlson is hereby
restrained from further use or disclosure of the Confidential Information of Grimes & Co.
MONETARY AND OTHER RELIEF
B That a judgment be entered in favor of Grimes ‘& Co. and against Mr. Carlson for
all monetary damages suffered by Grimes & Co., including its reasonable attorney’s fees, in such
\
amount as may be proved at trial.
Cc For such other and further relief as this Court may deem just and proper.
THE PLAINTIFF DEMANDS A TRIAL BY JURY OF ALL ISSUES SO TRIABLE.
17
4882-2570-2333, v. 1
Date Filed 5/22/2024 12:02 PM
‘Superior Court - Worcester
Docket Number
GRIMES & COMPANY, INC.
By its attorney,
/s/ Brian M. Casaceli
Brian M. Casaceli, BBO #690580
Mirick, O’Connell, DeMallie & Lougee, LLP
1800 West Park Drive, Suite 400
Westborough, MA 01581-3926
Phone: 508.860.1478
Fax: 508.983.6295
Email: beasaceli@mirickoconnell.com
Dated: May 22, 2024
VERIFICATION
I, Michael J. Davide, Chief Compliance Officer of Plaintiff Grimes & Company, Inc., do
hereby swear and affirm that the facts set forth in the foregoing Verified Complaint and Demand
For Preliminary and Permanent Equitable Relief, are true, except where asserted upon
information and belief, and in such instances, I have a good faith belief that they are true.
Signed under the pains and penalties of perjury this 22"4 day of May, 2024.
4s/ Michael J. Davide
Michael J. Davide
Chief Compliance Officer
Grimes & Company, Inc.
18
4882-2570-2333, v. 1
Date Filed 5/22/2024 12:02 PM
Superior Court - Worcester
Docket Number
EXHIBIT A
Date Filed 5/22/2024 12:02 PM
#
lopaBIEY. 29647CD9-046F-42A4-8283-7DASSDD7E10A
Docket Number
GRIMES“
AND COMPANY
CONFIDENTIALITY and RESTRICTIVE COVENANT AGREEMENT
| Brian Carlson acknowledge and fully understand the need to keep completely confidential the business
practices and operations of Grimes & Company, Inc., and each of its and their affiliated persons and entities,
successors and assigns (together, the "“Company). In consideration of my initial and continued
employment/association with the Company, | hereby acknowledge and affirm my obligations to the Company,
ni id | agree to be bound by the following terms of this Agreement:
1 1 acknowledge that the purpose of this document is to protect the Company's legitimate interests in its
client relationships, and the confidential information that the Company has developed about its clients,
Preview
Date Filed 5/22/2024 12:02 PM Superior Court - Worcester Docket Numb é-Filea COMMONWEALTH OF MASSACHUSETTS WORCESTER, SS WORCESTER SUPERIOR COURT CIVIL ACTION NO. AAS TCVST% B GRIMES & COMPANY, INC. Plaintiff, VERIFIED COMPLAINT AND Vv. DEMAND FOR PRELIMINARY AND PERMANENT EQUITABLE RELIEF BRIAN G. CARLSON., Defendant. INTRODUCTION This is an action brought by the Plaintiff, Grimes & Company, Inc. (“Grimes & Co.” or the “Company”), against its former employee, Defendant Brian G. Carlson (“Deéfendant” or “Mr. Carlson”), for breach of contract. Mr. Carlson has breached restrictive covenants set forth ina Confidentiality and Restrictive Covenant Agreement (the “Agreement”) he signed during his employment with Grimes & Co. As a direct of Defendant’s wrongful conduct, Grimes & Co. has lost business and is at great risk of an erosion of its customer base. By this action, Grimes & . Co. seeks preliminary and permanent equitable relief to prevent further irreparable harm. Grimes & Co. also seeks an award of monetary damages against Defendant for the harm it has already suffered. THE PARTIES 1 The Plaintiff, Grimes & Co., is a Massachusetts domestic corporation with a principal place of business in Westborough, Worcester County, Massachusetts. 2 The Defendant, Brian G. Carlson, an individual, is a New York resident, residing at 12 Ambergate Rise, Pittsford, NY 14534. Date Filed 5/22/2024 12:02 PM Superior Court - Worcester Docket Number JURISDICTION v 3 Mr. Carlson consented to the personal jurisdiction and venue of this Court pursuant to Section 13 of the Agreement. 4 Section 13 of the Agreement states, in relevant part: To the extent not inconsistent with applicable law, I acknowledge and agree that this Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts, and the venue (i.e., location) for the resolution of any dispute or controversy shall be the County of Worcester, Commonwealth of Massachusetts. A true and genuine copy of the Agreement is attached to this Verified Complaint as Exhibit A. FACTUAL ALLEGATIONS Grimes & Co. 5 Grimes & Co. is a Registered Investment Advisor (“RIA”) providing discretionary portfolio management and wealth management services for clients across the country. Grimes & Co.’s mission is to provide its clients with disciplined asset management, strong performance, and unparalleled service and support. 6 As an RIA, Grimes & Co. maintains a contractual relationship with promoting firms including Fidelity Investments (“Fidelity”) and Charles Schwab (“Schwab”). As part of these contractual arrangements, Fidelity and Schwab may refer their investor clients who express aneed and/or interest in securing professional portfolio management and wealth management services to Grimes & Co. Absent the contractual relationships Grimes & Co. has with Fidelity & Schwab, Fidelity & Schwab would not refer their clients to Grimes & Co. 7. When Grimes & Co. receives a client referral from Fidelity or Schwab, it then presents its services and a proposal to the client to retain Grimes & Co.’s discretionary portfolio management and wealth management services. 4882-2570-2333, v. 1 Date Filed 5/22/2024 12:02 PM Superior Court - Worcester Docket Number 8 Approximately half of the clients Grimes & Co. services are referred by Fidelity and Schwab. Most of the remaining clients Grimes & Co. services are referred by existing Grimes & Co. clients. 9 The identity of Grimes & Co.’s clients is not public knowledge. Indeed, only a limited number of individuals know who among the general public are Grimes & Co. clients who have demonstrated a specific need and desire for the services Grimes & Co. provides. Grimes & Co.’s Client Goodwill and Confidential Information 10. Grimes & Co. invests significant time, effort and resources in the development of its valuable relationships and the associated goodwill with its clients. It is imperative that Grimes & Co. keep its client goodwill protected to retain the competitive advantage that it has developed in its highly competitive industry. ll. Grimes & Co. has also invested significant time, effort and resources to develop confidential and proprietary information and processes to secure and maintain its competitive advantage in its industry. 12. Grimes & Co. has amassed a great deal of confidential and proprietary business information and trade secrets regarding its investment advisory operations, methods and practices, including, but not limited to, books, records, lists, computer programs, and other information or documents regarding the Company’s revenue, business methods, investment advisory process and practices (which includes financial planning and investment management), marketing strategies and plans, and referral sources, as well as information pertaining to the Company’s past, present and prospective clients, including, but not limited to, identity, address, email address, telephone numbers, telefax numbers, account numbers, investment objectives, service requirements, and fees charged (collectively, the “Confidential Information”).! 1 The definition of Confidential Information in this Paragraph shares the same meaning as in the Agreement. 3 4882-2570-2333, v. 1 Date Filed 5/22/2024 12:02 PM Superior Court - Worcester Docket Number 13. Grimes & Co.’s Confidential Information is highly valuable and provides Grimes & Co. a distinct competitive advantage provided it is used exclusively by Grimes & Co. and its employees. Indeed, with respect to Confidential Information concerning a client, no competitor can effectively target a Grimes & Co. client and address their needs without access to or specific knowledge of client-related Confidential Information. 14, The knowledge of the Confidential Information if available to or in the possession of Grimes & Co.’s competitors would be highly detrimental to Grimes & Co.’s ability to maintain its client relationships and revenue derived from those clients. Indeed, with knowledge of the identity of a Grimes & Co. client, a competitor could intentionally target the client and solicit their business. 15. Grimes & Co. undertakes a comprehensive, consistent and effective approach to protecting its Confidential Information. This includes but is not limited to consistent messaging to employees regarding the importance of confidentiality in offer letters, employment agreements (such as the Agreement), and training. 16. In addition, Grimes & Co. has adopted (i) a comprehensive privacy policy outlining how the Company protects the confidentiality of client information, and (ii) a written information security policy to ensure all client information in Grimes & Co.’s possession remains strictly confidential, and is accessed only by those employees at the Company who have a legitimate need-to-know. 17. The Company also uses computer passwords and multi-factor authentication to protect against unauthorized access to Confidential Information. Moreover, the Company sets access restrictions applicable to its own employees to ensure that employees are only permitted access to Confidential Information, including client-related information, which they need to perform their job functions. 4882-2570-2333, v. 1 Date Filed 5/22/2024 12:02 PM ‘Superior Court - Worcester Docket Number Mr. Carlson’s Employment with Grimes & Co. 18. Mr. Carlson began his employment with Grimes & Co. on March 14, 2016. Prior to the start of his employment, and in consideration of his employment with the Company, Mr. Carlson executed a Confidentiality and Restrictive Covenant Agreement (the “2016 Agreement”) containing, among other provisions, restrictive covenants governing his conduct both during and after his employment with the Company. 19. During his employment with Grimes & Co., Mr. Carlson held the position of Financial Advisor. 20. At the time of his hire and until in or about July 2020, Mr. Carlson lived in Westborough, Massachusetts. During that timeframe, Mr. Carlson spent the majority of his time physically working out of the Company’s office in Westborough, Massachusetts. In or about July 2020, Mr. Carlson moved to Pittsford, New York, where he worked remotely for Grimes & — Co. ' 21. As part of his job duties and responsibilities as a Financial Advisor, Mr. Carlson had access to and used Grimes & Co.’s Confidential Information in the performance of his job duties. In particular, as it relates to Grimes & Co.’s clients, Mr. Carlson was privy to their identity, address, email address, telephone numbers, telefax numbers, account numbers, investment objectives, service requirements, and the fees Grimes & Co. charged. 22. In his position with Grimes & Co., Mr. Carlson was responsible for assisting Grimes & Co.’s clients in identifying financial goals and working with Grimes & Co.’s portfolio management team to design investment allocations and determine strategy selections to meet clients’ needs. 4882-2570-2333, v. 1 Date Filed 5/22/2024 12:02 PM Superior Court - Worcester Docket Number 23. Mr. Carlson would regularly speak with Grimes & Co.’s clients over the phone, via videoconference, through email, or in-person. 24, As part of his job, Mr. Carlson would interview clients to determine current income, expenses, insurance coverage, tax status, financial objectives, risk tolerance, and other suitable information needed to develop a financial plan and investment policy statement. 25. / Mr. Carlson was also expected to consult with clients about their financial allocations and investment strategies as they evolve over time, and to contact clients periodically to determine any changes in their financial status. 26. Mr. Carlson was responsible for interactions with clients to ensure satisfaction and maintain favorable relations. Mr. Carlson was also responsible for managing ongoing client relationships. - 27. During his employment and with the support and investment provided by Grimes & Co., Mr. Carlson continued to develop Grimes & Co.’s goodwill with its clients. 28. Approximately 90-95% of the clients with whom Mr. Carlson worked at Grimes & Co. were referred to Grimes & Co. by Fidelity and Schwab. Most of the remaining clients with whom Mr. Carlson worked were referred to Grimes & Co. by other Grimes & Co. clients or assigned to Mr. Carlson by the Company. Mr. Carlson did not develop these clients through his own contacts or leads. 29. At least thirteen of the clients Mr. Carlson serviced while working for Grimes & Company were located in Massachusetts. Mr. Carlson Executes the Agreement 30. As part of Grimes & Co.’s contractual arrangement with Schwab, Schwab _ required Grimes & Co. to ensure that all of its employees who work with clients referred by Schwab abide by certain policies, including confidentiality and non-solicitation restrictions. 4882-2570-2333, v. 1 Date Filed 5/22/2024 12:02 PM ‘Superior Court - Worcester Docket Number 31. Consistent with Schwab’s requirement, in May 2023, Grimes & Co. provided those of its employees who desired to continue to receive client referrals from Schwab with an updated confidentiality and restrictive covenant agreement attaching a copy of the Schwab Advisor Network Contact Policy. 32. Grimes & Co. presented Mr. Carlson with the Agreement to review. 33. On May 31, 2023, in consideration of his continued employment and the ability to continue to receive client referrals from Schwab, Mr. Carlson executed the Agreement. If Mr. Carlson had not executed the Agreement, he would not have been permitted to continue to receive client referrals from Schwab. The Agreement superseded the 2016 Agreement. 34, The Agreement outlined Mr. Carlson’s obligations both during and after his employment. 35. Section 2 of the Agreement expressly provides: During the term of my employment/association, and forever thereafter (regardless of the circumstances surrounding termination), I agree not to use, communicate. reveal or otherwise make available such Confidential Information for any purpose whatsoever, nor will I divulge (or cause to be divulged) any such Confidential Information to any person, partnership, corporation or entity other than the Company except: (i) in furtherance of my employment duties to the Company: (ii) as required to testify truthfully before, or otherwise assist in any investigation or proceeding brought by the U.S. Securities and Exchange Commission, any state or federal regulatory body, or any law enforcement agency or other legislative body; or (iii) to the U.S. Securities and Exchange Commission about a possible securities violation in conformity with the “Whistleblower Regulations” under Section 21F of the Securities Exchange Act of 1934 including all related rules and provisions. Except with respect to the “Whistleblower Regulations,” upon termination of my employment, or at any other time that the Company may so request, I shall immediately deliver to the Company all such Confidential Information, including, but not limited to, all papers, notes, lists, computer programs, reports, books, records and all other documents (and all copies thereof) relating to the Company as made reference to above, which I may then possess or have under my control. The above restrictions apply to all Confidential Information regardless of the format in which it is created or maintained (hard copy, electronic, or otherwise), or where it is maintained, including, but not limited to, all computer(s) that you may possess or have access to away from the Company’s offices. The foregoing language is referred to herein as the “Confidentiality Clause.” 7 4882-2570-2333, v. 1 Date Filed 5/22/2024 12:02 PM Superior Court - Worcester Docket Number 36. Section 6 of the Agreement expressly provides: In recognition of the highly confidential and proprietary nature of the Company’s business methods and practices, I, during my employment/association with the Company, and for a period of twenty-four (24) months subsequent to termination of my employment/association for any reason (regardless of the circumstances surrounding termination), shall not, directly or indirectly, in any manner whatsoever: @) neither solicit to render, nor render or accept, as a principal, agent, employee, consultant, stockholder, partner, member, officer, director or in any other capacity, for the benefit of any person or entity other than the Company, any investment advisory (i.e., investment management, financial planning, and related consulting services) or securities and insurance sales or brokerage (including the sale of any investment or insurance product) business from/to (i) any person or entity who is a client (exclusive of family members) of the Company at the inception of my employment/association, or becomes a client of the Company during the term of my employment association, unless otherwise specifically excluded and set forth on an annexed Schedule “A” (which may be amended from time-to-time in writing), which Schedule “A” must be executed and dated by both the Company and me to be effective... In the event that the Company provides services to and/or through investment advisors, broker-dealers, or any other financial services provider (and/or directly or indirectly to any clients of such investment advisors, broker-dealers, etc.), the restrictions pertaining to the term “client” as used in this subparagraph 6a) shall also apply to all such entities... The foregoing language is referred to herein as the “Non-Solicitation Clause.” 37. On March 1, 2024, Grimes & Co. terminated Mr. Carlson’s employment. Upon his termination of employment, Grimes & Co. sent Mr. Carlson a copy of the Agreement and reminded him of his post-employment obligations to the Company, including the Confidentiality Clause and the Non-Solicitation Clause. 38. Grimes & Co. performed all of its obligations owed to Mr. Carlson during his employment and as part of the Agreement. Mr. Carlson’s Affiliation with Advisors Capital Management, LLC 39. On or about April 9, 2024, Grimes & Co. learned that Mr. Carlson became affiliated with the wealth management team of Advisors Capital Management, LLC (“ACM”). Mr. Carlson’s title with ACM is “Senior Wealth Advisor.” 8 4882-2570-2333, v. 1 Date Filed 5/22/2024 12:02 PM Superior Court - Worcester Docket Number 40. ACM is a competitor to Grimes & Co. 41. Mr. Carlson’s biography on ACM’s website states: Brian G. Carlson, CFP® is a Senior Wealth Advisor with ACM Wealth. He works with clients to create customized financial plans that align with their actively managed portfolios to achieve their long-term goals. As a CERTIFIED FINANCIAL PLANNER™ practitioner, Brian focuses on developing a comprehensive holistic financial plan for each client and implementing tailored investment strategies. Brian enjoys building meaningful relationships to better serve as a fiduciary and address the specific needs of each client. Prior to joining ACM in April 2024, Brian. guided over 150 families as a financial advisor from 2016-2024 at Grimes & Company, a nationally ranked RIA. (Emphasis added). A true and genuine copy of Mr. Carlson’s biography on ACM’s website is attached to this t Verified Complaint as Exhibit B. 42. As described in the above biography, Mr. Carlson’s job duties and responsibilities as a Senior Wealth Advisor with ACM very closely align with his job duties and responsibilities as a Financial Advisor for Grimes & Company. 43. Grimes & Co.’s Confidential Information, including information concerning Grimes & Co.’s clients, is being wrongfully used by Mr. Carlson in the performance of his activities on behalf of ACM. 44. Since his employment with Grimes ended, Mr. Carlson has, on behalf of ACM, solicited business from Grimes & Co. clients with whom he directly worked while employed by Grimes & Co. 45. Mr. Carlson’s solicitations have caused at least one Grimes & Co. client with whom he directly worked while employed by Grimes & Co. to transfer their business to him at ACM. Mr. Carlson’s Solicitations and Use of Confidential Information Client M.P.? ? To protect the privacy of the individuals in question, initials are being used for identification purposes. 9 4882-2570-2333, v. 1 Date Filed 5/22/2024 12:02 PM ‘Superior Court - Worcester Docket Number 46. M_P. became a Grimes & Co. client on or about May 5, 2020. M.P. was referred to Grimes & Co. by an existing Grimes & Co. client. Mr. Carlson provided investment advisory and wealth planning services to M.P. during his employment with Grimes. Only by servicing MP. on behalf of Grimes & Co. did Mr. Carlson become aware of M.P. and the fact they were interested in investment advisory services and wealth planning services. 47. On Tuesday, April 9, 2024, after Mr. Carlson’s employment with Grimes ended, M_.P. met with Grimes & Co. employee Cody Forbush (“Mr. Forbush”) to review M.P.’s accounts and discuss that he would be the Grimes & Co. representative servicing M.P.’s account moving forward. 48. On Thursday, April 11, 2024, Mr. Forbush sent M.P. an email following-up from their meeting on April 9. A true and genuine copy of the email is attached to this Verified Complaint as Exhibit C. 49. MP. did not respond to Mr. Forbush’s April 9 email. As a result, Mr. Forbush sent another email to M.P. on April 23, 2024. Exhibit C. 50. MP. responded to Mr. Forbush on April 24, 2024, writing: Cody, I reached out to Brian Carlson when I heard he was no longer with Grimes. We had developed a good working relationship over the last 4 years that I value. In addition, his new company looks to have more frequent and more understandable communication both written and recorded podcast. If they have not received it yet, Grimes will be receiving the required documentation for the change. I appreciated the more measured and balanced approach of Grimes investing. Not as much run up in good market times, but not as much downfall when the market is not doing so well. Thanks and best wishes. MP. Exhibit C. 10 4882-2570-2333, v. 1 Date Filed 5/22/2024 12:02 PM ‘Superior Court - Worcester Docket Number 51. On April 25, 2024, M.P. sent an email to Mr. Forbush stating: Brian, Here is the correspondence we just discussed. Note his initial email asking me to make a follow up appointment. Exhibit C. 52. Upon information and belief, M.P. intended to send the foregoing email to Mr. Carlson, but mistakenly sent the email to Mr. Forbush instead. M.P. then sent another email to Mr. Forbush on April 25, 2024, stating: “My apologies for sending you this message.” Exhibit C. 53. M_P. is no longer a client of Grimes & Co. 54. Mr. Carlson solicited M.P. on behalf of ACM to provide investment advisory services in violation of the Agreement. Due to Mr. Carlson’s solicitation, M.P. transferred their business from Grimes & Co. to Mr. Carlson at ACM. 55. Mr. Carlson violated the Agreement by using Confidential Information concerning M.P.’s identity to solicit them. 56. As a result of Mr. Carlson’s violations of the Agreement, Grimes & Co. has lost business. Client P.W. 37. P.W. became a Grimes & Co. client on or about March 28, 2019. P.W. was referred to Grimes & Co. by TD Ameritrade.? Mr. Carlson provided investment advisory and wealth planning services to P.W. during his employment with Grimes. Only by servicing P.W. on behalf of Grimes & Co. did Mr. Carlson become aware of M.P. and the fact they were interested in investment advisory services and wealth planning services. 3 Schwab acquired T.D. Ameritrade in 2020. 11 4882-2570-2333, v. 1 Date Filed 5/22/2024 12:02 PM ‘Superior Court - Worcester Docket Number 58. On May 7, 2024, Grimes & Co. received notification that P.W. was leaving Grimes & Co., and that they were going to work with Mr. Carlson at ACM. 59. P.W. is no longer a client of Grimes & Co. 60. Upon information and belief, Mr. Carlson solicited P.W. on behalf of ACM to provide investment advisory services to them in violation of the Agreement. Upon information and belief, due to Mr. Carlson’s solicitation, P.W. transferred their business from Grimes & Co. to Mr. Carlson at ACM. 61. Upon information and belief, Mr. Carlson violated the Agreement by using Confidential Information concerning P.W.’s identity to solicit them. 62. Upon information and belief, as a result of Mr. Carlson’s violations of the Agreement, Grimes & Co. has lost business. Client M.R. 63. MLR. became a Grimes & Co. client on or about September 20, 2022. M.R. was referred to Grimes by Fidelity. Mr. Carlson provided investment advisory and wealth planning services to M.R. during his employment with Grimes & Co. Only by servicing M.R. on behalf of Grimes & Co. did Mr. Carlson become aware of M.R. and the fact they were interested in investment advisory services and wealth planning services. 64. On March 27, 2024, Grimes & Co. employee Timothy D. Rheaume (“Mr. Rheaume”) met with M.R. via videoconference. MLR. informed Mr. Rheaume that they were not concerned with the prior performance of their investments, and liked that their investment accounts had the flexibility to convert to cash. Based on Mr. Rheaume’s conversation with M.R., Mr. Rheaume believed that M.R. would be staying with Grimes & Co. 65. However, on May 10, 2024, Grimes & Co. received notification that M.R. was leaving Grimes & Co. due to account performance. 12 4882-2570-2333, v. 1 Date Filed 5/22/2024 12:02 PM Superior Court - Worcester Docket Number 66. MLR. is no longer a Grimes & Co. client. 67. Upon information and belief, Mr. Carlson solicited MR. on behalf of ACM to provide investment advisory services to them in violation of the Agreement. Upon information and belief, due to Mr. Carlson’s solicitation, M.R. transferred their business from Grimes & Co. to Mr. Carlson at ACM. 68. Upon information and belief, Mr. Carlson violated the Agreement by using Confidential Information concerning M.R.’s identity to solicit them. 69. Upon information and belief, as a result of Mr. Carlson’s violations of the Agreement, Grimes & Co. has lost business. Client R.P. 70. R.P. became a Grimes & Co. client on or about August 30, 2022. RP. was referred to Grimes & Co. by Fidelity. Mr. Carlson provided investment advisory and wealth planning services to RP. during his employment with Grimes. Only by servicing R.P on behalf of Grimes & Co. did Mr. Carlson become aware of R.P. and the fact they were interested in investment advisory services and wealth planning services. 71. On or about May 2, 2024, Mr. Carlson initiated contact with R.P. Mr. Carlson informed R.P. that he obtained R.P.’s telephone number from R.P.’s son, who Mr. Carlson had looked up online and called the day before. 72. Mr. Carlson told R.P. that he was calling to catch up on a personal basis, and if R.P. wanted information on Mr. Carlson’s new firm, ACM, he would provide it. R.P. agreed, and Mr. Carlson sent them an email shortly thereafter with information about ACM. 2. Mr. Carlson violated the Agreement by soliciting RP. to provide investmerit advisory services and wealth planning services. 13 4882-2570-2333, v. 1 Date Filed 5/22/2024 12:02 PM Superior Court - Worcester Docket Number 74. Mr. Carlson violated the Agreement by using Confidential Information concerning R.P.’s identity to solicit them. 75. Upon information and belief, Mr. Carlson has solicited additional Grimes & Co. clients beyond M.P., P.W., M.R. & RP since his employment with Grimes & Co. ended on March 1, 2024. Cease and Desist Demand 76. Once it learned of Mr. Carlson’s efforts to solicit Grimes & Co.’s clients with whom he worked, Grimes & Co. — through its counsel — sent a demand letter to Mr. Carlson reminding him of his contractual obligations and demanding that he cease and desist from his wrongful activities. A true and genuine copy of the cease-and-desist demand dated April 30, 2024, is attached to this Verified Complaint as Exhibit D. 77. On the same day, Grimes & Co. — through its counsel — sent a demand letter to ACM advising ACM of Mr. Carlson’s contractual obligations, and demanding that ACM ensure 7 that Mr. Carlson’s violative conduct cease immediately. A true and genuine copy of the cease- and-desist demand dated April 30, 2024, is attached to this Verified Complaint as Exhibit E. 78. Mr. Carlson has not discontinued his wrongful conduct. 79. As a result of the wrongful conduct of Mr. Carlson, Grimes & Co. will suffer irreparable harm if that conduct is permitted to continue. 80. Grimes & Co. has no adequate remedy at law. COUNTI Breach Of Contract (Non-Solicitation Clause) 81. Grimes & Co. re-alleges and incorporates by reference all preceding paragraphs as if fully alleged herein. 14 4882-2570-2333, v.1 Date Filed 5/22/2024 12:02 PM Superior Court - Worcester Docket Number 82. By the conduct set forth herein occurring after the termination of his employment with Grimes & Co., Mr. Carlson breached the Non-Solicitation Clause in the Agreement. 83. As a direct and proximate result of the aforementioned breaches, Grimes & Co. has suffered and will suffer harm irreparable harm and monetary damages. ’ COUNT IL Breach of Contract (Confidentiality Clause) 84. Grimes & Co. re-alleges and incorporates by reference all preceding paragraphs as if fully alleged herein. 85. By the conduct set forth herein occurring after the termination of his employment with Grimes & Co., Mr. Carlson breached the Confidentiality Clause in the Agreement. 86. As a direct and proximate result of the aforementioned breaches, Grimes & Co. has suffered and will suffer harm irreparable harm and monetary damages. REQUESTED RELIEF The Plaintiff respectfully requests that this Court enter the following relief: PRELIMINARY AND PERMANENT INJUNCTIVE RELIEF A. That a Preliminary Injunction be entered during the pendency of this matter or until modified by this Court, and that a Permanent Injunction be entered thereafter restraining and enjoining Mr. Carlson as follows: 1 Disclosure of Solicitations of Clients. Mr. Carlson is ordered to immediately disclose all solicitations, conversations, or efforts made by him on his own behalf or on behalf of ACM, or any other person, business, company, corporation, entity or firm which competes with Grimes & Co., to divert or take away investment advisory (i.e., investment management, financial planning, and related consulting services) and/or securities and insurance sales or brokerage (including the sale of any investment or insurance product) business from any of those 15 4882-2570-2333, v. 1 Date Filed 5/22/2024 12:02 PM Superior Court - Worcester Docket Number clients with whom he worked and/or about whom he acquired Confidential Information during his employment with Grimes & Co. (hereinafter “Clients”) since March 1, 2024. 2 Discontinue Solicitations of Clients. With respect to any of the Clients, Mr. Carlson is hereby restrained from contacting or soliciting said Clients, or diverting or attempting to divert business of said Clients away from Grimes & Co. or otherwise interfering with Grimes & Co.’s relationship with any of said Clients. This Preliminary Injunction specifically restricts Mr. Carlson from any further efforts to solicit, divert, or take away investment advisory and/or securities and insurance sales or brokerage business from any Clients. 3 Disclosure of Acceptance of Business from Clients. Mr. Carlson is ordered to immediately disclose all investment advisory and/or securities and insurance sales or brokerage business he or ACM (as a result of Mr. Carlson’s solicitations) has accepted from Clients since March 1, 2024. 4 Non-Acceptance of Business from Clients. Mr. Carlson, on his own behalf or on behalf of ACM or any other person, business, company, corporation, entity or firm is hereby restrained from accepting any investment advisory and/or securities and insurance sales or brokerage business from any Clients that result from Mr. Carlson’s solicitation in violation of the Agreement.* 5 Identification of Disclosed Confidential Information. With respect to any Confidential Information including, but not limited to, information concerning Grimes & Co.’s clients, disclosed by Mr. Carlson to ACM or any other person, business, company, corporation, entity or firm, Mr. Carlson is ordered to immediately identify to Grimes & Co. all such Grimes & Co. is not seeking to enjoin Mr. Carlson from accepting business from Grimes & Co. clients that he did not solicit to provide investment advisory and/or investment advisory and/or securities and insurance sales or brokerage business, but who nonetheless contact Mr. Carlson voluntary and without prompting by him or anyone on his behalf. Moreover, Grimes & Co. is not seeking to enjoin Mr. Carlson from providing services to those Clients who have already transferred their business to him and ACM. Grimes & Co. will pursue monetary damages for these transgressions. 16 4882-2570-2333, v. 1 Date Filed 5/22/2024 12:02 PM Superior Court - Worcester Docket Number information disclosed. With respect to this identification, Mr. Carlson must include (a) the nature of the information, (b) the date of disclosure, (c) the nature of the disclosure, (d) the purpose of the disclosure, (e) the use made of the information disclosed, and (f) the name and position of all employees of ACM or any other person, business, company, corporation, entity or firm which competes with Grimes & Co., to whom such disclosures have-been made. 6 Delivery of Confidential Information. Mr. Carlson is ordered to deliver all Confidential Information in his possession to Grimes & Co. In conjunction with the delivery of said Confidential Information, Mr. Carlson shal! make copies to be retained by counsel to be used solely for the purposes of this litigation. 7 Deletion of Confidential Information. With respectto any Confidential Information Mr. Carlson may have in his possession, he is ordered to permanently delete said Confidential Information and certify under oath to this Court that he has done so. 8 Restraint on Disclosure or Use of Confidential Information. Mr. Carlson is hereby restrained from further use or disclosure of the Confidential Information of Grimes & Co. MONETARY AND OTHER RELIEF B That a judgment be entered in favor of Grimes ‘& Co. and against Mr. Carlson for all monetary damages suffered by Grimes & Co., including its reasonable attorney’s fees, in such \ amount as may be proved at trial. Cc For such other and further relief as this Court may deem just and proper. THE PLAINTIFF DEMANDS A TRIAL BY JURY OF ALL ISSUES SO TRIABLE. 17 4882-2570-2333, v. 1 Date Filed 5/22/2024 12:02 PM ‘Superior Court - Worcester Docket Number GRIMES & COMPANY, INC. By its attorney, /s/ Brian M. Casaceli Brian M. Casaceli, BBO #690580 Mirick, O’Connell, DeMallie & Lougee, LLP 1800 West Park Drive, Suite 400 Westborough, MA 01581-3926 Phone: 508.860.1478 Fax: 508.983.6295 Email: beasaceli@mirickoconnell.com Dated: May 22, 2024 VERIFICATION I, Michael J. Davide, Chief Compliance Officer of Plaintiff Grimes & Company, Inc., do hereby swear and affirm that the facts set forth in the foregoing Verified Complaint and Demand For Preliminary and Permanent Equitable Relief, are true, except where asserted upon information and belief, and in such instances, I have a good faith belief that they are true. Signed under the pains and penalties of perjury this 22"4 day of May, 2024. 4s/ Michael J. Davide Michael J. Davide Chief Compliance Officer Grimes & Company, Inc. 18 4882-2570-2333, v. 1 Date Filed 5/22/2024 12:02 PM Superior Court - Worcester Docket Number EXHIBIT A Date Filed 5/22/2024 12:02 PM # lopaBIEY. 29647CD9-046F-42A4-8283-7DASSDD7E10A Docket Number GRIMES“ AND COMPANY CONFIDENTIALITY and RESTRICTIVE COVENANT AGREEMENT | Brian Carlson acknowledge and fully understand the need to keep completely confidential the business practices and operations of Grimes & Company, Inc., and each of its and their affiliated persons and entities, successors and assigns (together, the "“Company). In consideration of my initial and continued employment/association with the Company, | hereby acknowledge and affirm my obligations to the Company, ni id | agree to be bound by the following terms of this Agreement: 1 1 acknowledge that the purpose of this document is to protect the Company's legitimate interests in its client relationships, and the confidential information that the Company has developed about its clients,