An arbitration panel ordered Credit Suisse to pay one of its former brokers $975,000 in back pay.
Nicholas Brine Finn, now an advisor at UBS, accused the firm of breach of contract, unjust enrichment and a false and misleading Form U5 filing.
It’s the second big loss for Credit Suisse, which is
Both men were presented by attorneys from the same law firm, Lax & Neville, in New York.
“It’s another big victory for all the relationship managers,” says attorney Barry Lax.
The disputes stem from how the Swiss firm shuttered its U.S. wealth management business.
Instead of selling the unit to a competitor, Credit Suisse entered into an exclusive recruiting arrangement with Wells Fargo, giving the wirehouse the inside track on hiring its roughly 250 brokers.
Credit Suisse also told its advisors that if they did not move to Wells Fargo they would not get their deferred compensation. More than half the advisors passed on Wells Fargo, with
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The advisers are also balking at the firm's insistence that former advisers seeking to claim comp go through its dispute resolution process instead of FINRA.
May 12 -
The firm is asking a judge to dismiss a class action suit and force a former broker into arbitration, instead.
April 3 -
After losing dozens of advisors who managed billions in client assets to UBS, scorned Credit Suisse strikes back with legal challenge.
December 17
The firm then tried to force claims launched by former employees into a private dispute resolution program rather than through FINRA proceedings. The
Brinn filed his complaint with FINRA in May 2017, according to a copy of the arbitration award.
He asked arbitrators for $800,000 in deferred compensation, plus interest, attorneys fees and damages.
Credit Suisse denied the charges and made counterclaims of its own: breach of contract, breach of fiduciary duty, unfair competition and misappropriation of trade secrets, according to arbitration records.
After 21 hearing sessions, the panel of three arbitrators sided wholly with Brinn. The panel also ordered that his reason for termination be changed to “Terminated without cause.”
Lax says this was significant because while Chilton waited to leave until Credit Suisse officially shuttered its U.S. wealth management business in March 2015, Finn left in November. In both cases, arbitrators came to the same conclusion.
“Even though [Finn] left then, it was determined that he was terminated without cause that day,” Lax says.
The arbitrators overseeing Finn’s case also ordered Credit Suisse to pay the full cost of the proceedings: $27,300.
“We note that the arbitration panel in this case largely rejected the claimant’s meritless monetary claims. We continue to believe that no one is entitled to recover the same dollar twice, and we will continue to defend our bank against meritless attempts to do so, as we have in many other proceedings where former brokers have abandoned such claims,” a Credit Suisse spokeswoman said in a statement.
