London's High Court has ordered startup Vestra Wealth, backed by US bank Goldman Sachs, to stay away from Swiss bank UBS's clients in Britain until a trial in October. UBS on Monday won a "springboard" injunction against Vestra, which had poached 75 of UBS's wealth management staff in Britain since May, UBS and Vestra said.
Vestra is 5-percent owned by Goldman and was set up by UBS's former top private banker in Britain, David Scott. The injunction stops Vestra from servicing UBS clients that switched to Vestra after July 16, Vestra said. "This legal action, which the court today upheld pending trial in October, was to ensure that certain senior departing employees abided by the contractual obligations that they agreed to when they joined UBS," UBS said in a statement.
UBS Wealth Management in Britain said on Friday Vestra had gained a head start in attracting its clients by luring away the 75 staff, which included around 20 clients advisers. "Everyone at the company is both surprised and disappointed," Vestra said after the judgement. "UBS are complaining about successful competition. This recruitment campaign was conducted in good faith and after taking legal advice every step of the way."
UBS is also suing Scott and four senior employees departing for Vestra for what it said was a secret plot to encourage more UBS staff to move to Vestra and to take clients with them. Last month, a senior UBS executive said the bank, which has been accused of helping some US clients to evade taxes, would stop offering cross-border private banking through its unregulated units to US-domiciled customers.
Vestra said UBS employees had left for the start-up, alongside recent departures for other competitors, because of dissatisfaction with the state of UBS's business and denied that there was an illegal plan to poach UBS staff and clients. UBS Wealth Management in Britain has around 300 client advisers and roughly 37 billion pounds ($72.80 billion) in invested assets.