Finra arbitration panel orders Credit Suisse to pay former broker $844,621

Brian Chilton moved to Morgan Stanley instead of Wells Fargo after Credit Suisse closed brokerage business

Oct 12, 2018 @ 1:46 pm

By Mark Schoeff Jr.

A Finra arbitration panel awarded $844,621 to a broker who sought deferred compensation from Credit Suisse related to the firm's shutdown of its brokerage operation three years ago.

The Financial Industry Regulatory Authority Inc. arbitrators ruled that Credit Suisse was liable to Brian Chilton for deferred compensation of $585,307, as well as $131,694 in interest and $146,326 in attorneys fees.

But the arbitrators also decided Mr. Chilton owed Credit Suisse $18,706 for an outstanding loan balance and attorneys fee. Credit Suisse must pay Mr. Chilton a net $844,621.

Mr. Chilton's job was eliminated when Credit Suisse closed its private banking business in the United States in 2015. He is one of many former Credit Suisse advisers who filed arbitration claims against the firm for allegedly withholding money it owed them.

"This is a huge victory, not only for Mr. Chilton but also for all of the financial advisers who are suing Credit Suisse for their deferred compensation," said Barry Lax, partner at Lax & Neville who represented Mr. Chilton.

The Finra arbitrators also ruled that the reason for termination on Mr. Chilton's Form U5 filed by Credit Suisse on April 7, 2016, be changed to "terminated without cause on March 16, 2016." It had stated that he was voluntarily terminated.

Credit Suisse entered an exclusive recruiting agreement with Wells Fargo & Co. But Mr. Chilton moved to Morgan Stanley, where he currently works, according to BrokerCheck.

Credit Suisse spokeswoman Karina Byrne said a number of former Credit Suisse financial advisers — referred to as relationship managers in the firm's nomenclature — are seeking to be paid twice for deferred compensation that has already been paid to them by competitor firms.

Although she said Credit Suisse as a practice does not comment on pending litigation, she did point out that Mr. Chilton's award was smaller than the compensatory damages in the range of $1.9 million to $3.4 million he requested at the end of the arbitration hearing.

"We note that the arbitration panel in this case largely rejected the claimant's meritless claims, and simply ordered him to repay the amount he owed on his loan but had refused to pay, in addition to Credit Suisse's legal fees," Ms. Byrne said in a statement. "We note that a federal court in California most recently dismissed a similar case filed by an RM seeking to be paid the same money twice."

But Mr. Lax countered that the arbitrators largely ruled in favor of Mr. Chilton.

"They didn't deny our claims," he said.

0
Comments

What do you think?

View comments

Recommended for you

Featured video

INTV

Why advisers are pessimistic about the economy

Deputy editor Bob Hordt and senior research analyst Matt Sirinides discuss a recent InvestmentNews survey of advisers, most of whom see a recession ahead before the next presidential election.

Video Spotlight

We started as a boutique firm with huge ambitions. Schwab was a perfect fit.

Sponsored by Schwab: Advisor Services

Recommended Video

Keys to a successful deal

Latest news & opinion

10 public companies that boosted their ESG ratings in 2018

These 10 companies increased their environmental, social and governance scores last year.

Blackrock exposed data on 12,000 financial advisers

The data appeared in three spreadsheets, linked on one of the New York-based company's web pages dedicated to its iShares exchange-traded funds

Advisers throw cold water on FIRE movement

Millennials love it, advisers don't: Turns out, extreme early retirement is a suitable goal for almost nobody.

10 universities with the most billionaire alumni

These 10 American schools have the greatest number of alumni who are billionaires.

Top-performing ETFs of 2018

The markets took a beating last year, but these exchange-traded funds bucked the trend

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print