Credit Suisse had entered into an exclusive agreement with Wells Fargo to recruit Credit Suisse registered representatives. The Swiss bank has closed its US brokerage.
A US wealth industry regulator has ordered Credit Suisse to pay three former brokers a total of more than $3 million in connection with a case concerning contested deferred compensation.
Arbitrators at the Financial Industry Regulatory Authority said that the Swiss bank was liable for failing to pay Christian N Cram, Andrew E Firstman and Mark G Horncastle money that they were owed when the lender closed its brokerage business in 2015.
At the time, Credit Suisse entered into an exclusive agreement with Wells Fargo to recruit Credit Suisse registered representatives. In November 2015, the three brokers joined the Atlanta office of JP Morgan Securities as a team.
The men were among a number of brokers who did not move across to Wells Fargo when Credit Suisse closed its brokerage operations and transferred them to the US bank. The advisors had filed claims against the Zurich-listed bank over deferred compensation that they alleged the bank had withheld.
FINRA awarded compensatory damages of $1.01 million to Firstman, $660,000 to Horncastle and $85,000 to Cram. All three were also awarded $97,596 in costs and $719,000 in attorneys' fees. The bank was also told to pay interest at the rate of 7 per cent on the compensatory damages starting from October 20, 2015, until the date of the award.
Media reports quoted Credit Suisse as saying that claims by their former brokers lacked merit.