ComplianceOctober 13, 2009

Insurance Agent Accuses Firm of Stealing 403(b) Clients

<p>An insurance agent who purchased a book of clients from a retiring co-worker is suing the firm with which he is associated for stealing some of that business.</p>

Reported by Rebecca Moore

The North Platte Bulletin in Nebraska reported that Randy and Lance Carlson of Carlson Financial Group are accused of transferring clients with 403(b) accounts to Lance Carlson after an informal agreement of the purchase but before the finalized sale. Glen Hogan claims that the Carlsons incorrectly told the retiring agent that he was not licensed to handle the contracts, even though they were aware that the files were to be sold to Hogan.

Both Hogan and retired agent Daryl Broberg said that a letter sent to them and Randy Carlson by Life Investors Financial Group after the agreement effectively transferred any and all clients with whom Broberg was associated with to Hogan, according to the news report. Broberg said in his affidavit that he never authorized any transfers of clients to any other agents.

Broberg verified Hogan’s accusation that the Carlsons transferred several client files from him under the mistaken pretense that he was not licensed to handle 403(b) retirement plans.

In the letter to Randy Carlson, Hogan stated that he never intended for Lance Carlson to take over any of the client cases, only to continue to work with his existing securities clients in that capacity. “It appears that you are trying to steal cases that I bought. You are undercutting me and my agents by going to the clients for these transfers. Why should I allow Lance to take any clients he wants?” Hogan wrote, according to the North Platte Bulletin.

Hogan, who allegedly paid Broberg $65,000 for the client book, said Lance had never offered to purchase any of the business, and threatened litigation if he was not made whole.

In addition to the court action, Hogan also filed a motion for a temporary restraining order preventing the Carlson’s from providing any services to the clients in Broberg’s book, saying that by the time a formal hearing is concluded, it will be too late for him to re-establish relationships with the clients.

The Bulletin said Hogan declined to comment on the story and Randy Carlson said he could not comment as he was not yet aware of the lawsuit.