Federal Judge Rejects Merrill Lynch's Renewed Bid to Force Dynasty Into FINRA Arbitration
From the desk of Jim Eccleston at 蘑菇传媒
A federal judge has denied Merrill Lynch's second attempt to compel Dynasty Financial Partners to arbitrate a high-profile dispute arising from allegations that the registered investment adviser (RIA) platform orchestrated the departure of a large Atlanta-based advisory team, according to AdvisorHub.
Merrill had argued that Dynasty effectively had agreed to resolve the dispute through FINRA arbitration, despite later asserting that it had never consented to the forum. Merrill asked the court to enforce what it viewed as Dynasty's agreement to arbitrate or lift the stay so the litigation could proceed in federal court.
U.S. District Judge Victoria Marie Calvert rejected that argument, finding that the record did not establish Dynasty's consent to arbitration. According to AdvisorHub, the court concluded that statements made by Dynasty's counsel during an earlier hearing, standing alone, did not demonstrate an agreement to submit the dispute to FINRA arbitration.
The court also emphasized that Dynasty is not a FINRA member firm. As AdvisorHub reports, the company cannot be required to participate in FINRA arbitration absent its consent. Although other defendants in the case, including Charles Schwab & Co. and the financial advisors who left Merrill Lynch, fall within FINRA's jurisdiction, Dynasty does not.
According to AdvisorHub, Merrill stated after the ruling that it would continue pursuing its claims in both court and arbitration.
As AdvisorHub reports, the dispute began in September 2025 when Merrill sued Dynasty, Charles Schwab & Co., and the leaders of a departing advisory team, alleging they coordinated a "corporate raid" on the firm's Atlanta office. Merrill alleged that approximately 70 of the team's 90 advisors left the firm. The group provided retirement plan services, equity compensation advice, and investment management for approximately $129 billion in client assets.
According to AdvisorHub, Merrill filed the lawsuit within hours of the advisors' departure.
The departing advisors denied the allegations and argued that Merrill attempted to retain them while simultaneously preparing litigation after they left the firm, AdvisorHub reports.
The latest ruling follows an earlier decision in October 2025, when the court denied Merrill's request for a temporary restraining order (TRO) against the former advisors and stayed the litigation.
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Tags: eccleston, eccleston law, finra arbitration, securities litigation, merrill lynch, ria transitions, broker recruiting disputes
