Former Hightower advisor sues firm over noncompete restrictions
A former advisor with Hightower is taking legal action against the firm over what he claims are overly restrictive and constraining non-compete clauses related to his past relationship with the firm.
In a document filed with the U.S. District Court for the Southern District of California, attorneys for Darren Reinig explained how Hightower was allegedly impeding their client’s ability to build a business after he left the firm.
Reinig’s relationship with Hightower began in 2019, when Hightowerfacilitated the merger of LA-based wealth management firm LourdMurray with Delphi Private Advisors – a firm Reinig helped found in 2009 – to create LMDP. After the merger, Reinig stayed on as the new entity’s chief investment officer.
The 2019 acquisition included a “standard protective agreement,” which contained broad non-solicitation, noncompete, and non-hire provisions. Under the non-solicitation and noncompete provisions, Reinig was prohibited from engaging with any business contacts or personnel related to Hightower or LMDP for 24 months after cutting off ties with Hightower.
In December 2021, Reinig decided to leave LMDP due to disagreements with the other principals. Hightower agreed to buy out his stake in the firm in exchange for cash considerations, among other terms. In buying Reinig out, Hightower retained the noncompete, non-solicitation, and non-hire clauses from the previous protective agreement.
After leaving Hightower, Reinig transitioned his clients to LMDP as part of a consulting agreement, then sought to pursue other business and work opportunities, mostly in California. According to Reinig’s attorneys, he followed the two-year noncompete restrictions stemming from the sale of his interests in LMDP, which
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