FINRA arbitrators rule in favor of brokers in Credit Suisse deferred compensation case

On Behalf of | Feb 23, 2022 | Firm Transition

A panel of Financial Industry Regulatory Authority arbitrators ruled in favor of a group of former Credit Suisse Securities brokers in a dispute with the firm, InvestmentNews reports.

The seven brokers said they were owed deferred compensation by Credit Suisse after it closed its U.S. private bank in 2015, and claimed the company breached its obligations to pay them. The three FINRA arbitrators ordered Credit Suisse to pay the group about $6.4 million in compensatory damages along with other costs and attorneys’ fees. The firm will also have to pay 10% in interest for each year since the brokers departed in 2015, bringing the total award to about $10 million.

Along with the monetary damages, the arbitrators also ordered that the explanation for the brokers’ termination on their Form U5s be changed from “voluntary resignation” to “other-termination without cause.” The change would allow them to collect deferred pay under their former contracts.

Credit Suisse had filed counterclaims against the brokers, saying the new firms they joined had paid them for deferred compensation they left behind. A spokesman said, “Credit Suisse continues to believe that no one is entitled to windfall double recoveries of amounts that they have already been paid by the firms they joined.” Six of the seven brokers joined UBS, with the other joining First Republic Securities.

The U5 form compliance attorneys at Lewitas Hyman have represented firms and individuals in matters affecting the securities industry. They blend industry and regulatory experience when representing financial professionals in Form U5 disputes and other related concerns. If you are concerned that you may be, or if you already have been, terminated from your firm, or if you believe you have inaccurate information on your Form U5, we invite you to contact us at (312) 291-4600 or through our online contact form to schedule a free consultation.

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