Wells Fargo loses another A.G. Edwards raiding case to Stifel

Wells Fargo Advisors LLC was ordered to pay $948,000 in legal fees and costs to Stifel Nicolaus & Co. Inc. and a former branch manager after it lost a claim against Stifel for hiring four of brokers from A.G. Edwards. The Financial Industry Regulatory Authority Inc. arbitration panel denied a claim by A.G. Edwards & Sons Inc., now part of Wells Fargo, that it suffered damages in losing the four brokers and a sales assistant to Stifel. The panel ordered Wells Fargo to pay $633,000 in attorneys' fees to Stifel, and another $282,000 in attorneys' fees to Chris Nielsen, the former A.G. Edwards branch manager in Grass Valley, Calif., who left in October 2007 with several Edwards brokers to set up shop for Stifel. In a 2007 court filing, A.G. Edwards claimed the brokers produced $1.6 million and had $220 million in client assets. Mr. Nielsen, in turn, alleged defamation by Wells Fargo and Gene Diederich, Edwards' director of branches. The arbitration panel, in an order issued last Friday, ruled in favor of Stifel and denied A.G. Edwards' claim. "We're disappointed," said Wells Fargo spokesman Tony Mattera. But Stifel chief executive Ron Kruszewski said he was disappointed that Wells Fargo "continued to sue people who were encouraged to explore their options -- [and] did so." The Grass Valley suit is one of several arising between Edwards and its successor firms, and Stifel. A number of Edwards brokers deserted ship in the wake of the 2007 takeover of Edwards by Wachovia Securities LLC. Last December, Wells Fargo was ordered to pay $1.1 million in legal costs to Stifel in a South Carolina case involving four legacy Edwards brokers. In the South Carolina case, the arbitrators said Wells Fargo attorneys may have misled a South Carolina federal court about video surveillance used as evidence against the brokers. The video was used to help get a restraining order against the brokers. Wells Fargo has sought to vacate that arbitration ruling. A court hearing on the matter is scheduled for May 13.