B. Riley Financial Inc Accuses Former Executive of Poaching Clients

B. Riley Financial Inc (NASDAQ:RILY) has leveled accusations against its former investment banking head, David Merriman, alleging he conspired to poach clients and personnel for Texas Capital Bank. The lawsuit, filed in Dallas last week, claims Merriman plotted with Texas Capital before his abrupt resignation prior to Thanksgiving.

The lawsuit asserts that Merriman's exit was part of a scheme to misappropriate B. Riley's trade secrets and confidential materials. Merriman and Texas Capital allegedly created a list of B. Riley investment bankers to target for poaching, utilizing Merriman's proprietary knowledge of the company's operations to identify the most lucrative employees.

Additionally, Merriman is accused of forwarding confidential data about current and potential business opportunities at B. Riley to personal email addresses. He allegedly began blind copying his personal email in discussions with a B. Riley client over a month before leaving.

B. Riley’s lawsuit states, "No sooner than his second day at Texas Capital Securities, Merriman hurriedly, directly, and brazenly began soliciting and attempting to induce a B. Riley investment banking client to divert its valuable business away from B. Riley and to Texas Capital Securities."

The firm is seeking a court order to prevent Merriman and Texas Capital from using B. Riley's confidential information and demands the return of all records.

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