Financial Industry Regulatory Authority arbitrators have sided with a former broker for Credit Suisse Securities in a dispute over deferred compensation, according to Investment News.
The broker, James D. Garrity, was awarded over $1 million in compensatory damages and $363,000 in prejudgment interest. Garrity was also ordered to pay Credit Suisse $34,000 in compensatory damages over unearned fees he received when he departed the firm.
The case stems from Credit Suisse’s decision in October 2015 to close its U.S. wealth management business. Garrity was one of nearly 300 brokers who alleged that Credit Suisse told them they had to voluntary resign as a way to avoid them paying them deferred compensation.
Garrity filed an arbitration claim in December 2020, citing causes of action that included breach of contract and unjust enrichment. While his financial award came to over $1.3 million, the FINRA arbitrators denied his request to amend or remove the reason he departed Credit Suisse on his Form U5, which will continue to state the departure was voluntary.
Garrity’s attorney was quoted as calling the ruling a “complete victory for Mr. Garrity”, and noted that he had won eight similar cases involving 26 brokers who have been granted deferred compensation. A spokesperson for Credit Suisse called the arbitration ruling legally flawed, and said the firm is weighing its options.
Those who choose to work in the financial services industry face a range of complex rules and regulations. If you are under investigation by your firm, terminated for cause or considering voluntarily leaving your firm, it is imperative that you hire counsel to advise you properly and protect your record. The attorneys at Lewitas Hyman have years of experience advising both financial advisors and financial firms on various types of employment issues, including deferred compensation. For more information about our financial services employment practice, please contact Lewitas Hyman at (888) 655-6002 or through our online contact form.
