Cavner countersues Lawing Financial

Kerry Lawing faces charges he led a media campaign against Cavner.

Former prominent financial adviser Nadia Cavner now is fighting back against the Overland Park, Kan.-based financial firm that bought her company last year and took her to court this spring.

In a civil countersuit filed Aug. 5, Cavner said Lawing Financial Inc. has no grounds to claim she overvalued her company or interfered with Lawing Financial’s business operations by assisting former clients after she lost her ability to sell securities last year.

“Filled with impertinent, scandalous and baseless ‘facts,’ the underlying complaint is a maliciously ginned-up narrative which Lawing publicly filed to defame, humiliate and discredit Cavner,” the filing states.

Lawing Financial’s breach of contract suit on April 15 asks the court to return the $1 million already paid toward the 2014 purchase of Nadia Cavner Group and to free the firm from its additional $2 million debt owed. The $3 million deal scheduled payments to Cavner for the next four years.

“Seeking to shirk the first payment obligation and all others, Lawing and [CEO] Kerry Lawing instituted this litigation and have engaged in a malicious, defamatory media campaign against Cavner,” her countersuit claims.

According to the purchase agreement, Lawing Financial was scheduled to make a $250,000 installment at midyear.

Lawing Financial’s suit alleges Cavner violated the acquisition terms by continuing to advise her former clients during a transitional period and telling them at times to disregard Lawing Financial’s recommendations. The company is asking the court to draw the lines regarding contact with its clients.

It also claims she opened an office across from the former Cavner Group space, had a former employee connect her with confidential client information and has harassed its advisers and staff.

A key financial claim, the company alleges Cavner intentionally overvalued her firm, listing the managed assets at $400 million – a misrepresentation of her book of business to the tune of $160 million, the suit says.

In the countersuit, Cavner is asking for at least $500,000 from the company for her consulting work and at least $75,000 in damages, plus attorneys’ fees. She also wants Lawing Financial to make good on the final $2 million owed her.

In her filing, Cavner denied all allegations she was improperly engaged in business practices prohibited by law.

Cavner said she managed $350 million in assets at the time of the sale, and 98 percent of her clients have transferred to Lawing Financial. In addition, Cavner claims she brought $20 million in new business to the company after the sale.

She said in the countersuit Lawing Financial knew full well she talked to former clients about financial matters during the unspecified transition period – even after authorities barred her from selling securities in late February 2014 for federal interstate stalking.

“She is specifically aware of practices conducted by Lawing, with full knowledge and approval by Lawing, that demonstrate Lawing’s ‘unclean hands,’” the filing states.

Cavner lists 20 examples when she and Lawing Financial representatives were working in concert to meet client needs. For instance, in May 2014, Cavner said Springfield Branch Manager Brad Lawing, Kerry’s son, shared client information with her regarding a $10 million account; in August 2014, she said Brad Lawing approved an updated client list for Cavner to help her in her role; and in December, another Lawing Financial adviser discussed with Cavner a $420,000 client transaction.

Further, Cavner said she was aware of complaints by an unnamed elderly couple regarding Brad Lawing’s transfer of $250,000 into Lawing Financial’s asset allocations funds. The couple allegedly said Lawing disregarded their instructions and was dishonest. It was one of several similar complaints the countersuit produced from unnamed customers recounting their experiences where they were dissatisfied with Lawing Financial.

“(Cavner) has suffered damage to her reputation, including being exposed to ridicule and embarrassment by members of her community and former co-workers, among others, and her esteem, goodwill, respect and character has been seriously diminished,” the filing reads.

The impetus to sell Cavner Group stems from the owner’s April 2013 guilty plea in federal court for intentions to injure, harass or intimidate her college-age daughter’s ex-boyfriend, Patrick McFarland. The felony conviction, which put Cavner on probation for five years, led her to leave eight-year employer BancorpSouth Inc. (NYSE: BXS) and to open her own firm. A month after she agreed to sell her firm, regulators formally revoked her licenses. A civil suit by McFarland is ongoing, and the next hearing is scheduled Sept. 10 in Greene County Circuit Court.

Bethany Bell, a public relations manager at Deep food branding company in Springfield, declined an interview on Cavner’s behalf.

Kerry Lawing, who had notified Springfield Business Journal about its civil case in the spring and Cavner’s countersuit, declined an interview request via spokesman Alex Greenwood of Alexander G Public Relations LLC. Greenwood emailed statements referring to a countersuit Cavner filed in 2005, when she was in court with a former employer, U.S. Bank.  

“Ms. Cavner in the U.S Bank case filed a counterclaim for defamation, interference and breach of contract which was denied in its entirety, while an award was entered against her on behalf of U.S. Bank. Now, she has ginned up another counterclaim, this one against Lawing,” Greenwood said. “We believe that her latest court filing is not responsive to Lawing’s case and does not defend her conduct.”