An intra-company tussle over potentially millions of dollars between Raymond James & Associates and two of its employee advisors came to a head last week.
An arbitration panel sanctioned by FINRA Dispute Resolutions Services ordered the firm to pay two advisors close to $1.86 million in compensatory damages and interest in a dispute that harkened back to Raymond James’ purchase in 2016 of Deutsche Bank’s U.S. private wealth group, which operates as the Alex. Brown brand.
The two Raymond James advisors who won the award are Michael Kuras and Patrick Marsh. Both worked at Deutsche Bank Securities when it was bought by Raymond James in 2016 and continue to work at the firm, according to their BrokerCheck reports.
A spokesperson for Raymond James on Monday declined to comment about the arbitration award. Brian Bender, an attorney for the two financial advisors, did not return a call to comment.
The dispute apparently dates back to deals done and compensation from several years ago during the time Kuras and Marsh worked at Deutsche Bank Securities, or Alex. Brown.
Raymond James, along with Kuras and Marsh, filed a claim against Deutsche Bank Securities 2021 claiming that the bank failed to pay revenue share payments and residual fee trailers on 10 commercial loans, according to an InvestmentNews report from 2023.
Jump forward two years, and a FINRA arbitration panel found Deutsche Bank liable on all 10 loan transactions and awarded Raymond James $16.4 million in compensatory damages and accrued interest.
The three-person arbitration panel ordered Deutsche Bank to pay the award to Raymond James, according to the InvestmentNews report, ruling that the brokerage firm was “jointly and severally responsible” for remitting any portion of the award to which Kuras and Marsh were entitled.
Then, Kuras and Marsh in 2023 sued Raymond James over the matter, alleging breach of contract, wage theft, civil theft and other claims against the firm, according to the award, which was finalized last Thursday.
According to the arbitration panel’s ruling, Marsh is to receive $1.23 million in damages, which includes interest, and Kuras $628,000. The two had originally asked for many times the awarded dollar amount in damages, according to the award.
In an explanation for the dollar amount of the award, the arbitrators used a standard grid payout rate of 40% as the basis for their calculation, while also taking account for a variety of other monetary factors.
“This panel has found there was no agreement between [Raymond James] and [Kuras and Marsh] governing the distribution of the prior arbitration award or the allocation of legal fees,” according to the award.
“To accomplish this, the panel adopted a proportionate approach, factoring in [the advisors’] percentage share of the recovery equivalent to the 40% grid rate and [the advisors’] percentage share of the recovery compared to the total award recovered by all claimants in the prior arbitration,” according to the award.
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