Ex-Osaic Advisors Lose Bid To Toss Suit Over 140 Clients
Two former Osaic advisors and the Wells Fargo-affiliated wealth management firm they joined have lost a bid to derail most of a lawsuit accusing them of taking more than 140 client accounts and confidential business information from Arthur J. Gallagher & Co. when they left the global insurance broker to join Granite Wealth Management.
U.S. District Judge Roderick C. Young of the Eastern District of Virginia allowed Gallagher’s breach of contract, fiduciary duty, conspiracy and related claims against former employees Alan Markfeld and Chris Geary and Granite Wealth Management LLC to move forward. The court dismissed a tortious interference claim.
Central to the ruling was a basic financial question: Had Gallagher itself suffered an injury that gave it standing to sue?
Young concluded it had. Gallagher alleged the defendants’ actions caused the company a direct economic injury through the loss of more than 140 client accounts, reduced assets under management and lost revenue. The judge rejected the defendants’ argument that Gallagher lacked standing because some client accounts were maintained through a third-party broker-dealer.
The decision keeps alive a closely watched fight over client relationships and confidential information as financial advisors increasingly move between firms or leave to launch competing businesses.
Gallagher alleges Markfeld and Geary joined the company in late 2022 and resigned abruptly in October 2025 to join Granite Wealth Management. Their employment agreements included restrictive covenants, confidentiality provisions and a requirement that they provide 21 days’ notice before leaving.
The company alleges the pair transferred more than 140 client accounts to Granite along with confidential Gallagher business information.
The latest ruling follows an earlier victory for Gallagher in the same case.
In July, Young partially granted Gallagher’s request for a preliminary injunction after finding the company was likely to succeed on its breach of fiduciary duty claims. The judge barred Markfeld and Geary from proactively soliciting Gallagher clients using the company’s confidential information.
Gallagher alleged the two systematically extracted protected client information before resigning, including client identities, assets under management and account reports. The company presented forensic evidence that Markfeld and Geary downloaded and printed multiple books of business and client account reports during the two months before their departures.
Young said that evidence, combined with Gallagher’s immediate loss of clients, strongly supported its allegation that the former employees took confidential information and used it to solicit Gallagher clients.
The court stopped short of reversing client transfers that had already occurred, however, saying the injunction should preserve the status quo without interfering with clients’ freedom to choose their financial advisor. Young also required Gallagher to post a $50,000 bond.
The dispute highlights an increasingly important distinction in advisor breakaway cases: Clients remain free to choose where they invest, but that freedom does not necessarily give departing advisors the right to take confidential information or violate enforceable contractual obligations in soliciting them.
That issue has become more significant as the legal landscape surrounding restrictive employment agreements changes.
The Federal Trade Commission has abandoned its effort to impose a sweeping nationwide ban on noncompete agreements, leaving firms and departing employees navigating a patchwork of state laws and increasingly fact-specific court decisions. Wealth management firms also have increasingly relied on narrower nonsolicitation, confidentiality and nondisclosure provisions to protect client relationships and proprietary information.
Gallagher’s case focuses heavily on those types of restrictions.
Gallagher provides insurance, risk management, consulting and wealth management services. In its wealth business, the company connects clients with Osaic Wealth for certain annuity and nonretirement brokerage accounts, according to court filings.
The defendants had argued that Gallagher’s use of another financial institution for some accounts meant any financial injury belonged to that entity rather than Gallagher.
Young disagreed, finding Gallagher’s alleged loss of clients, assets under management and associated revenue was enough to establish the concrete injury required for Article III standing. The possibility that another entity might also have a claim did not eliminate Gallagher’s own alleged financial harm.
Gallagher has not specified a fixed dollar amount it is seeking in damages. The company is pursuing damages and other relief tied to the alleged loss of client relationships and confidential information.
Attorneys for Gallagher and the defendants did not immediately respond to requests for comment.
With most of Gallagher’s claims surviving the motion to dismiss, the fight now moves forward over whether Markfeld, Geary and Granite actually breached their duties and agreements — allegations the defendants will have an opportunity to contest as the case proceeds.
