Former Credit Suisse Broker Wins Sliver of $6.8 Mln Pay Claim
(Updated on March 6, with additional details of award.)
In what a plaintiff’s lawyer describes as a “bunt single for the FA,” an arbitration panel has awarded just under $200,000 to a former Credit Suisse Securities financial advisor who joined a migration to other firms when the bank said in 2015 that it would close its U.S. broker-dealer.
David S. Greene, an advisor in Atlanta who now works at J.P. Morgan Securities, had requested $4.99 million in deferred compensation, performance bonuses and contractual guarantees, including more than $2.3 million in interest, lawyers’ fees and expenses.
A Financial Industry Regulatory Authority panel on Monday granted him $3.2 million related to the deferred comp and signing and performances bonuses that Credit Suisse withheld or rescinded. But it also ordered Greene to repay the bank the $2.97 million balance on a promissory note he signed, and $57,000 of overpayments that one lawyer said usually refers to unearned commissions. The arbitrators did not grant him lawyers’ fees.
On a net basis, Greene will collect $199,981.57, according to the award decision, which Finra posted early Tuesday. James Askren, the chairman of the three-person arbitration panel, dissented from his colleagues’ decision to give the broker any money, without commenting on his reasoning.
The case is the third straight arbitration decision in which advisors collected some back-pay and/or deferred bonuses after arguing that they were terminated without cause because of Credit Suisse’s decision to close its U.S. brokerage operations. As in the previously decided cases in New York and Boston, the deferred-stock compensation component of the award (paid in cash) was lower than requested because of a decline in the bank’s shares since the grant. The advisers in the previously decided cases did not have unpaid balances on their promissory notes.
“We’re very pleased,” said Ross Intelisano, whose New York law firm Rich, Intelisano & Katz represented Greene, who has been a broker for 20 years. He said his client’s $3.2 million award included the three principal components of deferred comp that were sought in the complaint, which was initially filed in January 2017.
The award was the first in the three arbitration cases decided to date to include a severance payment (of $2.2 million), which Intelisano said was unique to the employment contracts Greene had signed when he joined Credit Suisse from Goldman Sachs in April 2010.
Credit Suisse has filed to vacate an almost $1 million award made in November to a former advisor in New York, and is litigating claims from dozens of other former brokers in arbitration.
The bank declined to discuss how it will respond to the Greene decision, but a spokeswoman noted that arbitrators in the case “largely rejected the claimant’s meritless claims.” Credit Suisse used similar language to characterize the earlier arbitration decisions in New York and Boston that cumulatively awarded two brokers about $1.8 million.
The bank in all three cases argued that its former “relationship managers,” as it characterized its brokers, cannot double-dip by collecting deferred bonuses when their new employers compensated them for money left behind.
“We continue to believe that no one is entitled to recover the same dollar twice, and the chair in this case actually agreed in a formal dissent,” the spokeswoman wrote in an email. “We will continue to defend our bank against meritless attempts to do so, as we have in other proceedings where the RMs have abandoned such claims.”
Greene had been trying to collect an award of $2.13 million that he said was granted in 2012 for attracting accounts from Goldman even before the Swiss bank announced its decision to close the U.S. brokerage, Intelisano said.
“This is a bunt single for the FA, as opposed to the standup doubles in the other cases,” said Rogge Dunn, a Texas-based employment lawyer who is representing 24 other former Credit Suisse brokers making compensation claims. “But this is the first time I’ve seen an award for a severance payment in the Credit Suisse cases, which is a significant development.”