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 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.