Wachovia Securities was ordered to pay $1.1 million in attorneys fees and costs after its latest claim of raiding against St. Louis-based brokerage Stifel Nicolaus was dismissed by a FINRA arbitration panel.

The firms were locked in a battle over the move of financial advisors Frank Brand, Marvin Slaughter, Stephen Jones and George Stukes, who joined Stifel Nicolaus in Florence, S.C., from Wachovia Securities in June 2008. The advisors were long-time brokers at A.G. Edwards prior to Wachovia’s takeover of the firm in early 2008.

But when they joined Stifel on June 26, 2008 Wachovia immediately filed a claim. Wachovia leveled a number of charges against Stifel and the brokers, including breach of contract, misappropriation of trade secrets and breach of fiduciary duty. At the time the brokers left, Stifel had not signed the Protocol for Broker Recruiting. Under the Protcol, brokers leaving a firm are permitted to take their clients’ basic contact information, but other information, such as account numbers and positions, must be left behind. AG Edwards and Wachovia had both signed the Protocol and Stifel subsequently signed it in August 2008.

Wachovia sought to prevent Stifel from any further contact with the brokers’ clients, soliciting any other Wachovia advisors from leaving the firm, or transmitting any information relating to Wachovia’s clients, including contact details.

However, the FINRA panel rejected all of the claims and ordered Wachovia to pay a total of $15,080 in damages to the brokers, $73,350 in hearing fees and $1.1 million in attorneys fees and costs.

“For me and the guys I work with, we feel fully vindicated from the hurtful allegations leveled against us,” says Marvin Slaughter, one of the Stifel advisors. “We’re glad to have this distraction behind us.” Slaughter, an 18-year veteran of A.G. Edwards, says the team chose to move to Stifel following the takeover by Wachovia because it resembled the old culture at A.G. Edwards. “It felt like being back at A.G. Edwards 15 years ago,” he says. 

Slaughter and his team are not alone. A number of brokers from A.G. Edwards moved to Stifel, which, like A.G. Edwards, is a St. Louis-based regional firm, following Wachovia’s takeover. This has spurred a number of actions by Wachovia against Stifel, including a claim against former A.G. Edwards West Coast regional manager John Lee, who defected to Stifel in August 2007—prompting a number of his former brokers to follow suit. His arbitration is pending. 

Joseph Dougherty, a Philadelphia-based attorney with Buchanan, Ingersoll & Rooney, is representing Stifel in a number of these claims. “This decision shows the advisors did nothing wrong and brokers remain free to choose where they want to work,” he says.

Dougherty adds that Stifel has been successful in defending a number of similar claims in California. In May 2008, Samuel Slayden, a former A.G. Edwards branch manager in Santa Rosa, Calif., defended a claim against raiding after he moved to Stifel with three other advisors.

“Wells Fargo Advisors is very disappointed by this decision. We believe the case was wrongly decided and we intend to move to vacate the award,” said a Wells Fargo spokesperson in a statement. Wells Fargo acquired Wachovia in October 2008.