Credit Suisse has been ordered to pay two advisers $1.6 million finding that the firm wrongfully withheld deferred compensation owed to them. Five other cases went to awards this year, and arbitrators have awarded advisers more than $11 million in damages from Credit Suisse.
The claims stem from a ploy which Credit Suisse employed, in part, to keep the deferred compensation of brokers who it was effectively firing. Back in 2015 Credit Suisse decided to shut down its private banking operations, and announced a a transition agreement that lets Credit Suisse brokers move to Wells Fargo. Many brokers did not want to go to Wells, and given the fact that CS admitted that it was no longer going to run a retail business, brokers went to other firms.
Then CS turned around and claimed that the brokers who did not go to Wells broke their agreements with CS, and CS withheld their deferred compensation, which for many brokers was millions of dollars.
Not surprisingly, the brokers sued. And Credit Suisse is losing the arbitrations.
The problem is that brokers are only getting their own money back, and CS is not losing a dime, since it is being ordered to return the broker’s own money. Plus, CS is keeping the deferred comp of every broker who did not sue.
But maybe that will change. Arbitrators can award interest at the New York pre-judgment interest rate of 9% per year. They can also award punitive damages for the outrageous abuse of its employees and the legal process, and depending on the details, they may be able to award attorneys fees.
If you have been denied compensation by Credit Suisse, give Mark Astarita a call at 212-509-6544