Adam Bold, the RIA who went Hollywood -- literally -- after his Mutual Fund Store cash out, is accused of 'general chaos' at his Tinseltown talent agency
Business partners made the lurid allegations in a lawsuit that's scandalous even by Hollywood standards, charging Bold's aberrant behavior has driven the agency to the brink of bankruptcy; Bold calls it a 'shakedown.'
10 min read- Adam Bold faces lawsuit alleging mismanagement and misconduct at his talent agency.
- Partners claim Bold's actions led to A3 Artists Agency's near bankruptcy.
- Bold denies allegations, calling the lawsuit 'extortion'.
- Sale of A3's divisions is paused amid legal proceedings.
Brooke's Note: I was always an Adam Bold fan, even if he created a great big RIA and named it after a financial product. The ex-Smith Barney broker's rise and big liquidity events in 2011 and 2015 likely helped encourage the RIA executive to keep thinking big – even about mass market investors. He certainly made life interesting for us RIA journalists. He made a good habit of returning reporter phone calls and speaking his mind and offering real insight. But maybe success happened too fast, if a new lawsuit's allegations hold water. Should Bold still be part of RIA journalism? Bold was unusual for our industry for taking his windfalls and making a move for life in a faster, more glamorous lane in Hollywood. His talent firm had an estimated 200 staffers at one point. But what is not unusual anymore in the RIA business is that people are making “sudden wealth” and wondering what's next. Is something more exciting out there than getting the mass-affluent properly invested and advised? Take a deep breath before taking too big a leap.
Adam Bold was an early RIA pioneer who reinvented mass-affluent advice and built the Mutual Fund Store into a profitable empire before cashing out in a 2015 sale to Financial Engines for $560 million.
With a wad of money in his pocket, Bold set his sights higher – much higher.
He headed for Hollywood, aka Tinseltown, aka La La Land, aka the Boulevard of Broken Dreams to test his entrepreneurial mettle with a fast-money crowd of entertainers and newly minted social-media influencer millionaires.
It all came tumbling down in December, five years after he bought a majority stake in A3 Artists Agency, a venerable firm that had been in business since the 1970s.
A lawsuit alleges Bold ran the talent agency into the ground amid lurid accusations of sexual harassment, heavy cocaine use and a general “campaign of chaos” that drove away clients and employees.
His business partners are seeking a temporary restraining order (TRO) against him in a bid to salvage what remains of “a once-great company” that is on its way to “bankruptcy.”
Bold could not be reached for comment, but he told Variety, the Hollywood trade mag, the lawsuit is “a shake down and pure extortion."
Implosion
His business partners paint a far different picture. They claim Bold was an enfant terrible engaged “in an astonishing run of terror.”
"Bold has squandered everything: A3 is in a state of chaos and dissolution as its agents jump off the sinking ship and flee to A3 competitors, or wait in shock and fear for the next shoe to drop,” according to the lawsuit, filed Dec. 4.
Bold allegedly spent his time sexually harassing a “majority” of female staffers, firing ones he deemed unattractive and generally “creeping out his team,” often “intoxicated by cocaine.”
A3 partners Robert Attermann and Brian Cho filed the suit naming Bold, the agency itself and Superbrands Capital as defendants. It charged them with 10 counts of fraud and breach of contract.
At issue, was Bold's alleged attempt to sell A3 off “for parts and create a golden parachute for himself,” according to court papers.
For his part, Bold said allegations of sexual harassment and drug use were false. "I have evidence to prove it,” he declared in one interview.
In a surprise move, Bold unilaterally decided to shutter A3 for good this week (Feb. 12) after engineering a deal to sell its key Digital & Alternative Divisions to Gersh, which bills itself as the fourth-largest talent and literary agency in the world.
The sale is on hold pending the outcome of the lawsuit, according to Deadline, a Hollywood entertainment website.
Empire building
Ironically, Bold had a positive run during his time in the financial services industry.
He built an RIA empire by harvesting leads from his syndicated radio show. He founded The Mutual Fund Store in 1996 and franchised it into a national chain.
John Bunch is hired as the new CEO of The Mutual Fund Store
The RIA focused on the mass affluent, those with less than $500,000 in assets. At the time, few financial firms aimed at that market.
In 2011, the firm was the third-largest RIA in the country and managed $6.6 billion in assets for more than 33,000 households. He sold a majority interest to Warburg Pincus that year,but retained 43% of the company and continued on as chief executive and chief investment officer. See: How Warburg Pincus plans to grow The Mutual fund Store several-fold
When the deal was announced, Michael Martin, managing director and co-head of Warburg Pincus, said in a statement that The Mutual Fund Store has built a “loyal following across the U.S."
”We believe there is a tremendous opportunity to build on The Mutual Fund Store's success in providing sound investment advice to the mass affluent market," he said.
Cashing out
At the time, Bold told RIABiz he was eager to open more franchises and accelerate growth. But six months later, he stepped down, and John Bunch took over as CEO. See: John Bunch is hired as the new CEO of The Mutual Fund Store
The firm had opened in several new markets, such as Atlanta, Dallas and Little Rock, Ark., and Bold declared that he had fulfilled his destiny in an RIABiz interview.
"When I started, I had a dream of a national RIA that was coast to coast, border to border. It’s not just a dream anymore," he said at the time.
Financial Engines acquired the firm for $560 million in 2016 and picked up more than $9.8 billion in AUM held by more than 39,000 households across 129 locations.
Finacial Engines phased out the Mutual Fund Store brand, and in 2018, Edelman Financial purchased Financial Engines. See: Ric Edelman's RIA empire to merge with legacy The Mutual Fund Stores in $3-billion deal that takes Financial Engines private
By then, Bold had left the company and had set up shop in Hollywood.
Tinseltown vision
In 2021, Bold told Entreprenuer.com, that he intended to use much of the same client-first philosophy he had in the RIA industry to build A3.
“If what we do is good for the client, it'll end up being the right thing for us,” he told the publication.
He spoke about hiring the best people, giving them authority to do the job and hiring diverse talent.
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"We have become the go-to agency for diverse emerging talent, and it's because people want to do business with people who are like them and people who understand the trials and tribulations and the challenges that they face," he said.
He told Entrepreneur his biggest weapon has been the unwritten rule to be a “no a-hole policy.”
"It makes it easier to go to work," he said.
He also discussed how he wanted to change the advertising industry.
“As we sit here in 2021, we're in the golden age of content. But it's not television, and it's not films, and it's not digital. The worlds have blurred.
"My concept was that as agents, our job is to keep our clients working as much as possible and to make them as much money doing that work as possible,” he told the publication.
Stormy markets
Alleging gambling habits, SEC concerns and steady AUM declines, The Mutual Fund Store is offering $5.5 million to Jeff Roper to sell and walk away
The entertainment industry was rocked by the COVID-19 pandemic, which brought Hollywood to a halt. Then, the agency was hit by a simultaneous strike.
The Writers Guild of America and the Screen Actors Guild/American Federation of Television and Radio Artists (SAG-AFTRA) walked out on the Alliance of Motion Picture and Television Producers.
The Association of Talent Agencies, of which A3 is a member, was also caught up in what became known as “Hollywood's double strike,” the first since 1960.
Coming out of that triple calamity, Bold allegedly went off the rails.
"Rather than honoring his legal commitments to A3’s partners, employees and clients, Adam Bold’s tortious actions and breaches of his fiduciary duty culminated in his secretly attempting to liquidate A3’s assets by unilaterally assigning agents’ contracts to other companies without anyone’s consent,” plaintiff's lawyer Bryan Freedman told Deadline.
“This lawsuit will hold him accountable,” Freedman said.
Downward spiral
The lawsuit directly attributed A3's demise "to Bold's personality, leadership style and deviant behavior.
"He quickly became known around town and the A3 offices as unhinged, out of control and an overbearing narcissist who often appeared to be intoxicated or on drugs."
The lawsuit even cites Bold's divorce papers, which alleged he had a history of cocaine addiction so bad that it caused a rupture in his sinuses.
The lawsuit claims he sexually harassed “nearly all of A3's female employees, fired those he deemed unattractive, creeped out male and female employees with lewd remarks about female employees and his dating preferences, pitted the agents against each other and acted in a generally crazed, unusual and unnerving manner at every turn.”
Bold's alleged high-flying, drug-fueled lifestyle also included lavish spending – even during the industry's pandemic shutdown, according to court papers.
"Over the constant objections of Attermann and Cho, Bold was spending money at a genuinely astounding rate,” the suit states.
Living large
Bold operating style allegedly included rewarding his staff with Rolex watches and “wasteful employee retreats” that cost millions of dollars.
He also encouraged his staff to emulate his modus operendi by handing agents Platinum American Express cards and encouraging them to "spend lavishly to impress clients," the suit states.
One of Bold's biggest indulgences was A3's New York City offices in the Empire State Building.
He allegedly spent “millions upon millions of dollars" leasing and redecorating the space "on the logic that it would pay for itself with new clients. None of this turned out to be true," documents state.
When Bold realized he had “doomed the company,” he “secretly negotiated” to sell A3's most profitable divisions and best agents to the Gersh Agency.
That deal would provide Gersh with proprietary and trade secrets, the lawsuit alleges.
Power struggle
Attermann and Cho allege that “rich guy” Bold had an opportunity to become a “Tinseltown Heavyweight.”
But "instead of shepherding this marquee asset into a new era of expansion and prosperity, he has overseen its demise.”
The 37-page lawsuit filed in the Superior Court of California, alleges that Bold “single-handedly" caused the destruction of a "previously healthy agency…”
The lawsuit alleges that Bold removed Attermann from the board and stripped him of his voting rights, so he could sell the agency without approval or oversight from the board.
“Bold has used his new powers to sell A3 for parts and create a golden parachute for himself, leaving everyone else, including Attermann and Cho to pick up the pieces.
The entrepreneur allegedly papered over employee lawsuits and complaints by paying settlements without disclosing them to Attermann, Cho or the board.
The restraining order would prevent Bold from disclosing trade secrets to competitors. The lawsuit also seeks compensatory damages and punitive damages as well as attorney fees.
For his part, Bold accused Freedman of a “personal vendetta” against him and the company.
Sources told Deadline an effort will also be made to launch a new company that will include A3's remaining agents and clients.
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