The founders of Precedent Wealth, a San Antonio RIA offering profit-sharing to clients, have been sued by the bank that owns their former firm for allegedly stealing confidential information and trade secrets while acting improperly to poach clients served at their former firm.
Cadence Bank, which bought Linscomb & Williams in 2012, sued brothers Harold and George Williams for violating the national Defend Trade Secrets Act, Texas Uniform Trade Secrets Act and their contractual and fiduciary obligations when they left the firm last April after 50 years. Harold Williams founded L&W with Dan Linscomb in 1971, and George Williams joined soon after.
Among the allegations outlined in the report, the bank claims the Williams brothers neglected to give proper notice before resigning in an attempt to “maximize chaos and confusion” and that they reached out to clients before and after their departure with the help of a proprietary file containing personal information about 275 clients relating to their characteristics and preferences—a list the plaintiffs say they improperly accessed and retained.
Among the charges, the plaintiffs also allege that the Williams “misappropriated, and have threatened to continue to misappropriate” trade secrets related to portfolio modeling and performance, operations, asset management strategies, data reports and financial information that are “used to provide services and otherwise do business outside of Texas.”
“The Williams Brothers were also paid substantial sums of money in exchange for the trade secrets and confidential information they developed before selling Linscomb to Cadence and while employed in executive roles,” the suit notes.
In a court filing dated March 13, 2024, lawyers outline digital evidence that the Williams, along with Harold’s son, Grant, began planning their departure before the fall of 2022. They were prepared for potential litigation and met with Dynasty Financial Partners in November. Based on the evidence, the trio appears to have had at least some idea of how many assets would join them on “Day One.”
The filing states that Cadence has received “at least 80” notices of signed client transfers to Precedent from the bank’s RIA, which began operating as Linscomb Wealth in January.
“This unlawful conduct has resulted in a loss to Linscomb of well over $350 million in AUM to date, which, upon information and belief, has all transferred to Precedent,” according to the suit.
Precedent Wealth announced its launch on the Dynasty platform on April 26, 2023, just twelve days after officially resigning from Linscomb. The firm’s founders selected the name Precedent to highlight a profit-sharing, fee rebate program called ‘WillShare’ that Harold Williams said he hoped would set a new industry standard.
A Dynasty spokesperson said neither Dynasty nor the Precedent team would be available for comment on the suit; attempts to reach Cadence for comment were also unsuccessful.
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