An arbitration panel has ruled that Wells Fargo must pay Stifel $800,000 in the latest claim over alleged raiding of former A.G. Edwards advisors.
It is the sixth ruling that has been issued by a Financial Industry Regulatory Authority panel in disputes brought against Stifel by Wells Fargo. The claims arose over advisors who left from Wachovia as it was rolled into Wells Fargo in 2008 and 2009. This dispute, which originated in 2009, accuses Stifel of raiding and unfair competition; tortious interference; conversation and misappropriation of trade secrets; breach of fiduciary duty; and unlawful conspiracy related to 11 advisors from two Wells Fargo offices in Carlsbad and Escondido, Calif.
Wells Fargo sought more than $30 million in compensatory and punitive damages and asked for an order restraining Stifel from hiring or soliciting the hiring of more than 40% of the financial advisors by head count or production from any of Wells Fargo advisors branch offices.
In response, Stifel denied the accusations and issued a counter claim that Stifel is permitted to recruit/hire [Wells Fargo Advisors] employees so long as it conducts itself in accordance with the Protocol for Broker Recruiting and industry standards.
The case took place over 28 hearing sessions from mid-January to April of this year. In the end the panel of arbitrators denied Wells Fargos claims and held the firm liable to Stifel for $800,000 in attorneys fees and costs.
Wells Fargo had no comment on the case.
Stifel was also awarded attorneys fees in two of the other cases. In a case in New York last year, the panel denied both parties claims. Wells Fargo won $70,000 in one dispute and $167,000 in another where the firm asked for around $30 million as well.
According to the attorney representing Stifel in the case, Joseph Dougherty of Buchanan Ingersoll & Rooney, there are three more similar disputes accusing Stifel of raiding in California and Indiana that have yet to go before a panel.
These arbitration proceedings have certainly developed their own history at this point, Dougherty, who represented Stifel in almost all of the raiding cases, said. Stifel thinks that the arbitration panels are pretty clear as to how they feel [with regard] to the merits of these cases.