(September 25 – 16:30 ET) – Investors Group Inc. and rival AIC Ltd. are embroiled in a heated legal battle over sales reps.
IG has filed suit seeking an injunction restraining Berkshire Investment Group Inc., Berkshire Securities Inc. and AIC Ltd. from soliciting IG’s reps to join Berkshire; restraining former reps, now with Berkshire, from soliciting IG’s reps; and restraining Berkshire from inducing IG’s reps to solicit their clients to follow them before they leave. IG is also seeking general damages of $10 million and punitive damages of $5 million.
IG alleges that Berkshire has targeted and systematically recruited from IG’s sales force”with varying degrees of intensity and success since 1995″. It says during this time Berkshire has obtained confidential information that has been used in subsequent recruiting efforts.
IG says that in 1999 and 2000, Berkshire has recruited seven division managers or former division managers and 51 reps from IG. It alleges that Berkshire’s strategy has been to pursue managers in the hope that they will influence other reps to defect, too.
IG says its business has been damaged by the loss of personnel, loss of clients, loss of productivity in the sales force which has been required to work to retain clients. “These circumstances have put increased strains on the existing sales force; and loss of reputation and goodwill with the remaining consultants of Investors Group.”
IG’s Sales Representative’s Agreement requires that reps not use confidential information from the firm once they move on, and that they will not solicit former clients for two years. Yet IG charges the reps that have defected to Berkshire haven’t respected this, noting, “The unlawful conduct of the Berkshire Group is willful, high-handed and a flagrant abuse of the rights of Investors Group in relation to its clients and consultants. It is also in disregard of the best interests of the clients of Investors Group who should be protected from potential abuse from self-serving investment advice from former Investors consultants.”
AIC has filed a countersuit.
-IE Staff