Court orders Wells Fargo to pay up in failed raiding claim
A California appeals court has ordered Wells Fargo Advisors LLC to pay $915,000 in legal fees to Stifel Nicolaus & Co. Inc. and a Stifel broker.
A California appeals court has ordered Wells Fargo Advisors LLC to pay $915,000 in legal fees to Stifel Nicolaus & Co. Inc. and Stifel broker Chris Nielsen.
Last year, an arbitration panel ordered Wells Fargo to pay the fees, which stemmed from an unsuccessful raiding claim A.G. Edwards Inc. brought against Mr. Nielsen and Stifel in 2007.
A number of A.G. Edwards brokers jumped ship in the wake of the 2007 takeover of A.G. Edwards by Wachovia Securities LLC. Wachovia was later taken over by Wells Fargo.
After its arbitration loss last year, Wells Fargo appealed the arbitration decision to the San Francisco Superior Court, arguing that the arbitrators refused to consider or did not see some important evidence. The court upheld the arbitration ruling. Wells Fargo appealed again.
But in a ruling Friday, the appeals court rejected the firm’s claim of prejudice by the arbitration panel.
“There is no doubt that A.G. Edwards was given a full and fair opportunity to present its claim,” the court’s decision said.
It was not immediately clear whether Wells Fargo can appeal a third time.
Lawyers representing Mr. Nielsen and Stifel, and spokespersons for Wells Fargo, were not immediately available.
“I think [Wells Fargo was] grasping at straws” in appealing the case, Mr. Nielsen said.
Mr. Nielsen, based in Grass Valley, Calif., left Wachovia in October 2007 with several A.G. Edwards brokers to set up shop for Stifel.
A.G. Edwards claimed at the time that the brokers produced $1.6 million and had $220 million in client assets.
The dispute was one of several arising between A.G. Edwards and Stifel in the wake of the Wachovia takeover.
“The arbitrators in this case got it right and delivered a strong message,” said Stifel’s attorney, Joe Dougherty, co-managing shareholder at Buchanan Ingersoll & Rooney PC. “Now, two courts have agreed that the arbitrators’ rulings should not be disturbed.”
Mr. Dougherty said Wells Fargo could ask the California Supreme Court to review the case on appeal.
Wells Fargo spokesman Tony Mattera declined to comment.
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