Another Finra arbitration panel has ruled in favor of former Credit Suisse registered representatives in a deferred compensation dispute, according to the industry’s self-regulator.
In 2017 Jonathan Joseph Galli, Paul Timothy Connolly, Alexander Victor Martinelli and Christopher Leo Herlihy claimed breaches of contract and implied convent of good faith and fair dealing, conversion, unjust enrichment and false and misleading Forms U5, according to an award document published by Finra. At the hearing, the four registered representatives — all of whom are now with UBS, according to BrokerCheck — requested well over $20 million in damages and costs, as well as the expungement of their Forms U5, Finra says.
In its counterclaim, Credit Suisse requested dismissal of their claim, $151,201 in compensatory damages plus interest “and a declaration that Claimants are not entitled to vesting or delivery of their unvested contingent deferred awards under the share plan and related documentation,” according to the award document.
The arbitrators awarded the four registered representatives a total of around $2.1 million in compensatory damages, costs and lawyers’ fees, but denied their requests for expungement, Finra says.
Credit Suisse has faced multiple claims over deferred compensation in the wake of exiting the U.S. wealth management business in 2015, when it sold its business here to Wells Fargo. The brokers involved have won millions of dollars in awards, but Credit Suisse has also fought back, challenging the arbitration awards in court, which in one case could bring the deferred compensation issue to the U.S. Supreme Court.
Credit Suisse also convinced a judge to dismiss a $300 million class action over deferred pay in 2018 and won a Finra arbitration in which UBS, where many of the former Credit Suisse advisors ended up, was ordered to pay Credit Suisse $9 million in compensatory damages.
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