Focus Financial Partners has been the subject of a cluster of lawsuits since its 2023 sale to Clayton, Dubilier & Rice, including a federal securities class action and a Delaware Chancery shareholder suit challenging the merger, two separate cases brought by departing advisors attacking restrictive covenants, and a trademark infringement suit Focus itself filed against a breakaway team. The merger cases are largely resolved in Focus’s favor, one Chancery disclosure claim survives, the advisor covenant fights have gone to arbitration or remain in discovery, and the trademark case settled quickly after the defendants agreed to rebrand.
The 2023 Buyout and the Cases It Produced
In August 2023, CD&R and Stone Point Capital closed an all-cash acquisition of Focus at $53 per share, a roughly 36 percent premium over the 60-day volume-weighted average price. Focus stock was delisted from NASDAQ and the company went private.1U.S. Securities and Exchange Commission. Focus Financial Partners Completion of Acquisition Press Release A special committee of independent directors had run the sale process, and the merger agreement included a 40-day go-shop period.2U.S. Securities and Exchange Commission. Focus Financial Partners Press Release
Two shareholder suits followed. Both leaned on the same factual grievance: that a competing offer from Wealth Enhancement Group had been sidelined.
Federal Securities Class Action Dismissed
Five investment funds — Kryger Event Fund Ltd., Kryger Enhanced Fund Ltd., ODS Capital LLC, AltShares Event-Driven ETF, and AltShares Merger Arbitrage ETF — filed a consolidated class action in the U.S. District Court for the District of Delaware, captioned In re Focus Financial Partners, Inc. Securities Litigation, Case No. 23-1466. Saxena White P.A. was appointed co-lead counsel in March 2024.3Saxena White P.A. Saxena White Appointed Co-Lead Counsel in Focus Financial Partners Securities Class Action
The plaintiffs alleged violations of Sections 10(b), 14(a), and 20(a) of the Securities Exchange Act of 1934. They said the merger proxy concealed conflicts of interest, misrepresented how “robust” the sale process actually was, and glossed over the decision to shut out WEG’s higher bid.4Midpage. In re Focus Financial Partners
Judge Maryellen Noreika dismissed the case on March 31, 2025. She held that statements about the fairness of the merger and the robustness of the process were opinion statements under the Omnicare framework, and that the plaintiffs had not shown those opinions were insincere. The court found the proxy adequately disclosed the WEG negotiations, the committee members’ compensation, and the financial advisors’ fees. Allegations of scienter were “too general/threadbare” to meet the heightened pleading standard, and the plaintiffs were net purchasers of Focus stock after the merger announcement, making their losses speculative. With no primary violation, the Section 20(a) control-person claim also failed. Conflict allegations built on shared social circles or a desire to keep post-merger jobs were called “highly speculative.”5U.S. District Court for the District of Delaware. In re Focus Financial Partners, Inc. Securities Litigation Opinion
Delaware Chancery Suit Trimmed but Not Killed
Shareholders also sued in the Delaware Court of Chancery. On April 3, 2025, Chancellor Kathaleen St. J. McCormick dismissed most of the claims but let one survive. The court threw out allegations that Stone Point Capital acted as a controlling stockholder or formed a control group with Focus insiders, and dismissed aiding and abetting claims against CD&R and Goldman Sachs without prejudice. Because the deal had been approved by a fully informed, uncoerced vote of disinterested stockholders, the business judgment rule applied rather than entire fairness.6InvestmentNews. Delaware Court Allows Disclosure Claim in Focus Financial Buyout Lawsuit to Proceed
The surviving claim asks whether the proxy was materially misleading about the sale process, board deliberations, and the handling of WEG’s bid. The chancellor converted the remaining motions to dismiss into motions for summary judgment and ordered limited discovery. All other dismissed claims were stayed pending that outcome.7Law360. Chancery Trims Claims, Limits Ruling on Focus Financial Suit
The WEG Bid at the Center of Both Cases
Wealth Enhancement Group emerged as a bidder in late 2022. On January 17, 2023, the special committee solicited formal offers from both CD&R, which bid $51.50 per share, and WEG, which bid $51.75. After further negotiation, CD&R raised its price to $53 and WEG raised its to $55. The committee then signed an exclusivity agreement with CD&R on January 30, 2023, effectively closing the door on WEG.
The committee’s explanation, as recounted in the court opinion, was that WEG’s $55 was preliminary and non-binding, subject to due diligence and financing contingencies, and conditioned on exclusivity that would have forced Focus to walk away from advanced talks with CD&R. Without exclusivity, WEG said it would only evaluate a deal at the lower $51.75 figure. The committee concluded WEG’s bid was “unlikely to result in a definitive transaction.”8CCH. In re Focus Financial Partners, Inc. Securities Litigation Opinion
Advisor Lawsuits Over Restrictive Covenants
Patrick and deButts
On June 16, 2025, former registered investment advisors James Patrick and William deButts sued Focus, Edge Capital Group, and SCS Capital Management in the U.S. District Court for the Southern District of New York. Both had been principals at Edge Capital, an Atlanta firm Focus acquired in 2018. They asked the court to declare the non-solicitation, non-hiring, and confidentiality covenants in their 2018 management agreement unenforceable under New York law.9ThinkAdvisor. Advisors Sue Focus Financial Over Staggeringly Overbroad Restrictions
They called the covenants “staggeringly overbroad” and “profoundly anticompetitive,” alleging they were barred for two years from soliciting or servicing any client or prospective client of Edge Capital or any Focus-affiliated firm, whether or not they had ever met that client.10Wealthmanagement.com. Advisors Sue Focus Claiming They’re Shackled by Profoundly Anticompetitive Contracts The complaint also alleged Focus structured a sale of substantially all of Edge Capital’s assets to SCS Capital Management in a way that benefited larger equity holders at the plaintiffs’ expense. According to the complaint, Edge Capital’s co-founder Harry Jones told a Goldman Sachs representative the firm had to “get rid of” Patrick and deButts to close the SCS deal, and later told a referral source he had “fired” Patrick. After the two were cut off from firm email on January 6, 2025, Focus and Edge Capital allegedly contacted their clients suggesting the advisors had already resigned.9ThinkAdvisor. Advisors Sue Focus Financial Over Staggeringly Overbroad Restrictions
The suit also argued Focus deliberately structured its acquisitions to avoid FINRA rules prohibiting this type of covenant for registered representatives, by binding advisors through management-company agreements rather than broker-dealer employment contracts.10Wealthmanagement.com. Advisors Sue Focus Claiming They’re Shackled by Profoundly Anticompetitive Contracts
The plaintiffs never got a merits ruling. Focus invoked an arbitration clause in the management agreement, and on August 19, 2025, Judge Denise L. Cote granted the motion to compel arbitration and stayed the case. The parties filed a stipulation of voluntary dismissal on November 17, 2025. Patrick and deButts joined NewEdge Wealth.11CourtListener. Patrick et al v. Focus Financial Partners, LLC
NKSFB
In 2023, roughly 50 principals from NKSFB (Nigro Karlin Segal Feldstein & Bolno), a prominent Hollywood business management firm, sued Focus in Los Angeles seeking to invalidate the non-compete provisions of an amended management agreement dated July 2022. They said their original five-year non-compete from Focus’s 2018 acquisition had expired in April 2023, and that the new restraints violated California Business and Professions Code Section 16600, which broadly bars contracts preventing lawful professional activity. They also challenged the agreement’s Delaware choice-of-law clause.12The Hollywood Reporter. Hollywood Business Managers at NKSFB Sue to Invalidate Non-Competes
As of September 2024, the case was still in discovery. Judge Edward B. Moreton Jr. of the Los Angeles Superior Court granted competing motions to compel in part, narrowed KSFB’s demand for Focus’s internal sale-process documents to those specifically discussing the non-compete provision, and declined to impose sanctions.13Rulings.law. KSFB Management v. Focus Financial Partners Ruling
The Holsopple Precedent on Forum Selection
An earlier Delaware Chancery case, Focus Financial Partners, LLC v. Holsopple, C.A. No. 2020-0188-JTL, shapes the ground under the California advisor fights. Focus had sued former employee Scott Holsopple for breaching non-competition, non-solicitation, and confidentiality covenants after he preemptively sued in California to void them. The Chancery Court held that California Labor Code Section 925 gave California a “materially greater” interest in protecting resident-employees than Delaware’s interest in freedom of contract, voiding the Delaware forum-selection and choice-of-law clauses. It also rejected Focus’s argument that the internal affairs doctrine required Delaware jurisdiction over an LLC’s employment relationship with its workers.14McCarter & English, LLP. Court of Chancery Rejects Internal Affairs Doctrine in Employment-Related Lawsuit
Mosaic Trademark Suit
In May 2026, Focus went on offense. Former Focus-affiliated advisors John Buckingham, Jason Clark, and Christopher Quigley left the firm on April 24, 2026, to launch a practice backed by Mariner Independent under the name “Mosaic Value Partners.” Focus alleged the name infringed its federally registered trademarks for “Mosaic Family Wealth” and “Mosaic Family Office,” plus a pending application for “Mosaic Wealth,” and said the defendants had incorporated their entity while still affiliated with Focus and launched a website despite two cease-and-desist letters.15Financial Advisor Magazine. Focus Sues Breakaway Firm for Trademark Infringement Over Use of Mosaic Name
Focus filed in the U.S. District Court for the Central District of California and sought a temporary restraining order.16Justia. Focus Financial Partners LLC v. Mosaic Value Partners LLC The breakaway team rebranded as Value87 Investment Partners.17Citywire RIA. Mariner-Backed Breakaway Team Rebrands Amid Focus Lawsuit By late May 2026, the parties had settled the trademark claims.18Financial Advisor Magazine. Focus Breakaway Firm Drops Name After Trademark Suit A separate non-solicitation suit filed alongside the trademark case had a hearing scheduled for August 2026.19AdvisorHub. Focus Breakaways Rebrand Following Trademark Suit