M&A Attorney Corey Kupfer Analyzes Merrill Lynch vs Schwab Case
Oct 05, 2025
Corey Kupfer, managing partner of Kupfer, PLLC and host of the DealQuest podcast, was recently featured as a key legal expert in Citywire's coverage of a significant dispute between financial industry leaders Merrill Lynch and Charles Schwab. The case, which involves a $129 billion breakaway team and claims of trade secret misappropriation, represents an unusual expansion of traditional advisor raiding litigation to include custodians and service providers.
Understanding the Legal Dispute
The case centers on OpenArc Corporate Advisory, a newly formed RIA that departed from Merrill Lynch's Global Corporate and Institutional Advisory Services (GCIAS) business. In an uncommon legal strategy, Merrill filed suit not only against the departing advisors but also against their selected custodian, Charles Schwab, and RIA service provider Dynasty Financial Partners.
According to Citywire's reporting, Merrill claims that the OpenArc team shared confidential client information with Schwab, which the custodian allegedly used to advance its business interests and assist OpenArc in soliciting GCIAS employees. The wirehouse further alleges that both Schwab and Dynasty helped OpenArc secure approximately $90 million in capital to fund the transition.
Expert Analysis from the Field
Drawing on his firm's extensive experience with advisor breakaway transactions, Kupfer provided context for understanding the legal issues at stake. He explained that Schwab's defense will likely focus on its role as an independent custodian serving business that was leaving Merrill regardless of which custodian was chosen.
Kupfer noted that custodians are generally permitted to help breakaway teams "prepare to compete" through assistance with paperwork, account setup, and transitions. However, he acknowledged that if evidence showed Schwab obtained client information before resignations or beyond what's allowed under the Broker Protocol (typically five pieces of information), there could be grounds for legal claims against the custodian.
What Makes This Case Significant
Kupfer identified a particularly notable aspect of Merrill's approach: naming corporate defendants like Dynasty and Schwab who don't actually employ any of the former Merrill advisors or staff. Traditional raiding lawsuits typically focus only on the departing employees and their new employer, making this legal strategy somewhat unprecedented in the industry.
Kupfer observed that Merrill's decision to include a major custodian as a defendant signals a shift in how wirehouses view the competitive landscape. He noted the contrast with earlier industry attitudes, pointing out that wirehouses can no longer credibly claim they're unconcerned about advisors moving to independence when they're pursuing legal action against the service providers who support those transitions.
About Corey Kupfer
With more than 35 years of professional deal-making and negotiating experience, Corey Kupfer has established himself as an authority on M&A transactions, advisor transitions, and strategic business growth. His firm has assisted numerous advisors with transitions to RIA independence, providing him with practical insight into the legal and business considerations involved in these moves.
Through his DealQuest podcast, which has produced over 325 episodes, Kupfer explores deal-driven growth strategies by interviewing successful entrepreneurs and business leaders about their experiences with complex transactions.
Looking Ahead
As Kupfer noted in his analysis, Schwab will likely seek dismissal from the case. The outcome could have implications for how custodians interact with breakaway teams and the level of support they can provide during transitions.
For advisors considering independence and the service providers who work with them, this litigation will be worth monitoring as it develops.
To learn more about Corey Kupfer's work in M&A and advisor transitions, connect with him on LinkedIn or listen to the DealQuest podcast for insights on deal-driven business growth.
LEGAL DISCLAIMER: This blog post discusses publicly reported legal proceedings and expert commentary. It does not constitute legal advice and should not be relied upon for legal decision-making. The content reflects analysis based on publicly available information as reported in the cited Citywire article dated September 29, 2025.
