Oppenheimer Loses $28 Million Claim Against Jefferies Wealth Executive
Oppenheimer & Co. has lost an attempt to collect $28.5 million from Jefferies LLC and a fixed-income executive in its wealth management unit, and must pay almost $500,000 of its opponents’ legal costs, an arbitration panel ruled on Wednesday.
Opco brought its claim against Jefferies and Gregory A. Fisher, the Atlanta-based head of Jefferies Wealth Management’s emerging market bond business, in December 2015, days after he and five members of his team jumped between the firms.
Oppenheimer asked for $27.8 million in compensatory damages plus lawyers’ fees and expenses of over $700,000, asserting claims that included unfair competition, breach of contract and misappropriation of trade secrets.
In a decision that hints at the risks of bringing what arbitrators may consider frivolous actions, the three-person Financial Industry Regulatory Authority arbitration panel in Atlanta denied Oppenheimer’s claims in their entirety. It ordered the firm to pay Fisher and Jefferies’ $493,100 of attorneys’ fees, citing New York and Georgia statutes addressing bad-faith claims and vexatious litigation.
The arbitrators, who also ordered Oppenheimer to pay $41,800 of hearing and related costs and denied Fisher’s counterclaim for unspecified compensatory damages, fees and costs, did not otherwise explain the reasons for their decision.
“We always believed that these claims were meritless and are pleased that the Finra panel agreed,” said a Jefferies spokesman.
A spokeswoman for Oppenheimer said she could not immediately comment, and Fisher did not return a call for comment.
Fisher, who had been Oppenheimer’s cohead of emerging market institutional fixed income sales, was hired by former Jefferies wealth management head Michael Armstrong in November 2015, along with financial advisers Carlos Alvarez, Matthew Kennedy and Greg Johnson, according to published reports at the time. Jefferies employs about 50 retail brokers, including the Atlanta-based team.
Fisher has accumulated 20 complaints over his 31-year career that began at Drexel Burnham Lambert in 1985, according to his BrokerCheck record, and was “permitted to resign” from Shearson Lehman Hutton in 1990 over a client’s allegations of breached fiduciary duty.
Andrew Shapren, a lawyer at Buchanan Ingersoll & Rooney in Philadelphia who represented Fisher and Jefferies, was on vacation, said a colleague. She declined to comment on the award or details of the case.
Oppenheimer’s arbitration claim also named a third party, Nelleen Smith, as a respondent, but the firm withdrew its monetary claims against her at the end of the case’s 22 hearing sessions, according to the award.
Smith, who like Fisher had worked at Oppenheimer for ten years before joining Jefferies, has been a registered representative for 20 years and has no disclosures on her BrokerCheck record.