An arbitration panel has ordered Citigroup to pay $24 million to a team of financial advisors formerly employed by the firm following their claims that they were not compensated fairly for transactions involving a long-term institutional client.

Financial advisors and brothers James Bryan Minchello and Robert Vincent Minchello, along with their administrator Martha Jane Sullivan, filed their claim with the Financial Industry Regulatory Authority (FINRA) involving compensation for transactions involving one of their institutional clients.

The Minchellos joined Citigroup in 2002 from Banc of America Securities. When they moved to Citigroup, the team took a roster of institutional clients with them, which mainly included venture capital firms and their limited partners. One of those clients, an undisclosed technology incubator that was in the process of changing its business model, had worked with the Minchellos’ team for about 10 years before they joined Citigroup.

That client continued to work with the team once they joined the firm, and how those transactions were handled became the subject of the conflict between the team and Citigroup that led to the arbitration.

“Citi paid them in part on the first few transactions, but subsequently cut them out of participating in the communications and transactions with their clients and refused to pay them,” said Peter R. Pendergast, the lawyer representing the claimants and a partner at Boston law firm Prince Lobel Tye LLP.

When the Minchellos and Sullivan first filed their arbitration claim with Citigroup in May 2009—about one month after they left the firm—they requested $78 million in compensatory damages and $156.1 million in interest and punitive damages. They also requested other relief including costs and attorneys’ fees.

The FINRA panel’s decision, which was made public Monday, awarded approximately $24 million to the financial advisor team, which included $15.8 million in compensatory damages plus 6% annual interest from Dec. 15, 2004 until Jan. 13, 2012. Citigroup has also been ordered to pay $1 million in sanctions to the advisors. All other relief, including requests for punitive damages, was denied.

“We are disappointed with this outcome and disagree with the decision,” Citigroup spokeswoman Danielle Romero said Tuesday.

Pendergast said he could not comment for his clients, who now work at JPMorgan Securities, but did offer his own statement.  “The award reflects a just result and a rebuke to the practice of certain industry participants accepting the benefit of executing transactions on behalf of advisors’ clients and refusing to pay promised compensation,” he said. “The size of the transactions involved, the revenues generated and the award make this case very unique.”  

Lorie Konish writes for On Wall Street.