By Andrew Welsch

Months after Merrill Lynch sued a $129 billion financial advisor team that left to launch an independent firm, Merrill finds itself back in federal court, this time accusing one of the defendants, Dynasty Financial Partners, of reneging on an agreement to arbitrate their dispute.

In a Feb. 12 filing, Merrill says that Dynasty, alongside the advisors and Charles Schwab, agreed to arbitrate its claims that they conspired to "poach" its business. But in the months since then, Dynasty has taken the position that it never consented to arbitration at Finra, the brokerage industry's self-regulatory organization, and that it wouldn't submit to Finra's jurisdiction, according to Merrill.

"Merrill now finds itself at a procedural impasse," the company's filing says. "Dynasty, despite its conduct during the TRO [temporary restraining order] hearing and thereafter, refuses to arbitrate, and the court action is stayed."

Merrill is asking a judge to either compel Dynasty to arbitrate the case or allow it to pursue claims against Dynasty in court while it proceeds with its arbitration case against the advisors. The latter option "is the most equitable given Finra's lack of jurisdiction over Dynasty and Dynasty's apparent (and belated) refusal to consent to Finra arbitration, " according to Merrill's filing.

A spokeswoman for Dynasty says the company "strenuously disagrees with Merrill's continuing mischaracterizations at every point in this matter and we are preparing our response to this most recent attack."

St. Petersburg, Fla.-based Dynasty helps advisor teams leave national brokerage firms, such as Merrill, to open registered investment advisory firms. It also provides technology, asset management, and other services to RIAs. When the former Merrill advisor team quit in September to launch OpenArc Corporate Advisory in Atlanta, it did so with help from Dynasty, which also took a minority equity stake in OpenArc, according to a press release.

OpenArc uses Charles Schwab as its custodian, meaning that Schwab provides OpenArc with a trading platform and safeguards client assets on its behalf. A Schwab spokeswoman declined to comment on the case.

Merrill filed its lawsuit in a federal court in Atlanta against the advisors, Dynasty, and Schwab on the same day that the advisors quit. In October, a federal judge denied the company's request for a temporary restraining order.

Write to Andrew Welsch at andrew.welsch@barrons.com

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February 19, 2026 14:56 ET (19:56 GMT)

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