Carnegie Investment Counsel sued over valuation suppression

The former managing associate of Eagle Ridge Investment Management, which Carnegie Investment Counsel acquired final yr, has sued the Ohio RIA and its high executives. He alleges they lowballed the worth of his stake, whereas aiming to promote Carnegie to potential consumers on earnings that have been practically double the determine used to worth his exit. 

David Okay. Laidlaw, the previous managing associate of Stamford, Connecticut-based Eagle Ridge Investment Management, filed the grievance Aug. 7 within the Cuyahoga County Court of Common Pleas. The defendants are Carnegie Capital Asset Management LLC, which does commerce as Carnegie Investment Counsel; in addition to Carnegie’s CEO Richard Alt and president Gary Wagner. Seven different Carnegie members are additionally named as defendants, although the swimsuit makes no allegations in opposition to them. 

Laidlaw alleges, “upon data and perception,” that Alt and Wagner have been advertising and marketing Carnegie on the market on estimated EBITA (Earnings Before Interest, Taxes, and Amortization) of about $21.3 million at multiples of 16 to 17 instances. This measurement would worth Carnegie at round $341 million to $362 million. 

‘Suppresion of EBITA’ 

However, Laidlaw alleges the defendants used “adjusted EBITA” of about $11.7 million and a 14x a number of in a written valuation of Carnegie. That places Carnegie’s valuation at about $164 million, roughly $177 million to $198 million lower than the implied gross sales pitch valuation.  

“There is a fabric dispute in regards to the integrity of the monetary statements, the intentional manipulation and/or suppression of EBITA, and valuation metrics relevant to Plaintiffs possession curiosity within the Company,” reads the lawsuit from Laidlaw.  

Carnegie Investment Counsel and Alt didn’t reply to a request for remark. Sean Needham, who works for Ohio-based legislation agency Reminger and is representing Laidlaw in his lawsuit, additionally didn’t reply to a request for remark. 

The two events additionally disagree on the valuation date. Laidlaw contends it to be March 31, 2026, whereas the defendants contend that the valuation date is May 31, 2026. Laidlaw holds 4.7 of about 109 Class A models, or roughly 4.3%. Wagner and an entity managed by Alt collectively maintain about 92% of Carnegie’s Class A models, in accordance with the working settlement included within the grievance. 

Laidlaw gave discover April 27 that he deliberate to retire, which triggered Carnegie’s obligation underneath its working settlement to purchase his models at honest market worth. His determination to retire took place 15 months after Carnegie announced its acquisition of Eagle Ridge. A press launch for that transaction famous that Eagle Ridge has $1.3 billion in belongings underneath administration, and elevated Carnegie’s complete belongings by greater than 25%. 

Laidlaw’s registration as an asset placement adviser consultant with Carnegie ended July 9, and he exhibits no present registration, in accordance with his SEC IAPD report. He had been managing associate with Eagle Ridge since 2015. 

Requests from Laidlaw to examine Carnegie’s inner books on May 12, May 28 and June 17 have been allegedly ignored or rebuffed. On June 10, he was allegedly advised the information have been “not needed or acceptable for a valuation.” He says he realized on July 20 of discrepancies among the many agency’s reviewed monetary statements, inner statements and tax returns.  

Alleged self-dealing 

The grievance additionally alleges that Alt requested to rent an inner controller, however Wagner refused, which is “additional evidencing his full management over the inner books, information, monetary statements and accounts,” per the grievance.  

The swimsuit additionally alleges that Alt and Wagner diverted third-party advisory or incentive charges for private use— an unspecified quantity in 2025 and $2.2 million in 2026. It additionally alleges that Alt and/or Wagner had Carnegie pay for a personal jet and journey to private residences in Utah, Florida, Pennsylvania, New York, and Grenada, amongst different outdoors commerce ventures that have been hid in “self-dealing” bills. Laidlaw argues these prices depressed the earnings used to cost his exit. 

Carnegie reported $7.5 billion in regulatory belongings throughout 8,541 accounts and 69 staff in its July 2026 Form ADV submitting, together with a nine-person advisory employees in Stamford, Conn. In October 2025, Carnegie added AHL Investment Management, a Florida agency with roughly $220 million in AUM. Crain’s Cleveland Business reported in March that Carnegie was ordered to pay $2.3 million in shopper damages following accusations of breach of fiduciary obligation and civil conspiracy.

Shades of Marcum Wealth case

Laidlaw’s case echoes one other Cuyahoga County lawsuit decided earlier this year through which a minority proprietor of a Cleveland-area RIA alleged that controlling companions manipulated financials in “shareholder oppression” amid a possible sale. In 2024, Wendy Eldridge, a former managing director at Marcum Wealth, accused the agency’s CEO of manipulating profit-and-loss figures throughout sale negotiations with Hightower. A jury this yr awarded her about $3.2 million. Eldridge happens to also now work at Carnegie as a retirement plan advisor since she joined the firm July 2024.