Another Credit Suisse Alumnus Wins Deferred Comp in Arbitration
(Updates with comments from Credit Suisse spokeswoman in sixth and seventh paragraphs.)
An arbitration panel has awarded a former Credit Suisse Securities broker in New York City $975,531 in deferred pay that he claimed the Swiss bank illegally withheld from him.
The November 6 award to Nicholas Brine Finn, now a broker at UBS Financial Services, is the second in a month resolving one of a slew of claims from financial advisors who left Credit Suisse after it announced in the fall of 2015 that it was shuttering its U.S. retail brokerage operations.
The bank had encouraged brokers to move to Wells Fargo Advisors, but many went to other firms and brought arbitration claims when their former employer declined to release their unvested awards.
The award to Finn, based on the value of his deferred Credit Suisse shares as of his departure date to UBS in November 2015, represents “all of the compensatory damages related to his compensation,” according to Barry Lax, one of his lawyers.
Finn had requested compensatory damages ranging from the $975,531 he was awarded to $1.1 million, as well as $2.45 million to $2.71 million in attorneys’ fees, interest and so-called liquidated damages under New York State employment law, according to the award document posted on a Finra dispute resolution website.
“We note that the arbitration panel in this case largely rejected the claimant’s meritless monetary claims,” Credit Suisse spokeswoman Karina Byrne wrote in an e-mail that also alluded to the practice by some firms of compensating experienced brokers for bonuses that were left behind.
“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.”
In addition to their damages award to Finn, the three arbitrators recommended that Credit Suisse change the reason for his departure to “other”on his U5 regulatory termination form, with the comment that he was “terminated without cause.”
The arbitrators did not explain their decision, but Lax said it likely turned on his argument that the bank’s U5 filing was erroneous in describing Finn’s termination as “voluntary,” since brokers were essentially forced to leave after its decision to close the business was announced. Under terms of Credit Suisse’s award agreements with its brokers, deferred compensation automatically vests if a broker is fired without cause, he said.
Lax made the same argument in an arbitration case decided last month that awarded a former Credit Suisse broker in Boston almost $845,000.
The arbitrators in the Finn case denied Credit Suisse’s counterclaim for unstated damages and other relief as a result of the broker’s alleged breaches of contract and fiduciary duty, and of his “misappropriation of trade secrets.” The three-person panel in New York City also assessed Credit Suisse for all $27,300 of its fees for 21 hearing sessions and pre-hearing conferences.
Credit Suisse in December 2017 filed an arbitration claim of “raiding” against UBS, which hired close to one-third of its 336 U.S.-based brokers. The case is ongoing.