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Wells Fargo awarded $20.7M in poaching dispute with Raymond James

On Behalf of | Feb 21, 2023 | Financial News

Wells Fargo Advisors was awarded $20.7 million by arbitrators after accusing Raymond James Financial Services of poaching advisors, reports Financial Advisor.

Wells Fargo filed a complaint in August 2020 alleging that Raymond James and advisor Kent Jackson Rhoades carried out what it called a “coordinated raid” on its branch office in Mountain Home, Arkansas. The claim stated that Raymond James recruited Wells Fargo advisors at that branch, five of whom then resigned and opened a Raymond James branch office nearby while taking assets from the Wells Fargo office with them. The Mountain Home Wells Fargo office was forced to close as a result.

Wells Fargo cited numerous charges in its complaint, including unfair competition, breach of contract, conspiracy and breach of fiduciary duty. A panel of Financial Industry Regulatory Authority arbitrators ruled recently in favor of Wells Fargo. Raymond James and Rhoades were ordered to pay Wells Fargo $15.3 million in compensatory damages.

Raymond James will have to pay an additional $1 million in punitive damages. Rhoades was held individually liable for $3.5 million in Wells’ legal fees along with another $847,000 in costs. No explanation was provided for the panel’s decision.

In November 2020, Raymond James had requested that the Wells Fargo claims be denied and dismissed in their entirety with prejudice. A spokeswoman for Wells Fargo said the firm was pleased with the outcome of the arbitration case and “appreciates the arbitration panel’s recognition of the damages caused by this conduct.”

Handling financial services disputes requires counsel with a significant understanding of the industry, the laws, rules and regulations that impact our clients and the forums in which disputes are adjudicated. At Lewitas Hyman, our attorneys’ unparalleled litigation experience comes from leveraging their industry-specific knowledge developed from working at firms such as Morgan Stanley, UBS Financial Services and EVEREN Securities, serving as outside counsel for some of the world’s largest law firms, and through prior affiliations with the SEC. For more information about our arbitration and litigation services, please contact Lewitas Hyman at (888) 655-6002 or through our online contact form.