A former broker for Credit Suisse has won his arbitration case against the firm in a dispute involving deferred compensation, reports AdvisorHub.
A Financial Industry Regulatory Authority panel awarded nearly $2.2 million to David R. Barnes, who said Credit Suisse improperly withheld the compensation he was due when it shut down its U.S. wealth management unit seven years ago.
In a 2-1 split decision, the arbitrators ordered the Swiss bank to pay $1.65 million in compensatory damages, $500,000 in attorney fees and $20,000 in discovery-abuse sanctions. Credit Suisse’s counterclaim, requesting that Barnes repay nearly $542,000 for a promissory note it said he owed, was unanimously rejected by the panel. No explanation was issued for the decision.
Nearly 300 advisors were affected by the Credit Suisse shutdown in 2015 and many have been able to recover some of their back pay. But the bank has claimed that the bonuses many of the brokers received from the firms that hired them negated their right to seek deferred compensation. Barnes had gone from UBS to Credit Suisse in 2009 and went back to UBS in 2016 following Credit Suisse’s U.S. closure.
He filed his arbitration claim in August 2016 that asserted, among other violations, breach of contract, unjust enrichment, and illegal forfeiture of earned compensation.
Reacting to the ruling, Credit Suisse noted that Barnes had received far less than the $17 million he had sought during the arbitration process, and said the fact that one of the arbitrators dissented from the decision strengthened the firm’s belief in its case.
The attorneys at Lewitas Hyman have handled thousands of promissory note matters for some of the largest financial services firms in the world, as well as on behalf of registered representatives. In this capacity, we have handled claims before FINRA, AAA and JAMS arbitration panels in contested and protracted hearings. If you need guidance on matters related to promissory or forgivable notes, contact Lewitas Hyman at (888) 655 6002 or through our online contact form for a free consultation.