Wells Fargo Advisors LLC says it's nearing a settlement with
Raymond James Financial Inc. over the alleged poaching of brokers from four of its branches.
The agreement would end a lawsuit filed by
Raymond James challenging a decision in February by the
Financial Industry Regulatory Authority Inc. In that decision, a Finra arbitration panel ordered
Raymond James to pay Wells $12.1 million for claims related to the alleged raiding of its employees.
Wells Fargo spokesman Tony Mattera said today that the two firms are “in the process of finalizing a settlement but have not yet completed it.”
Raymond James also confirmed that a deal is near. “The parties have reached an agreement in principal to settle the matter,” said spokeswoman Anthea Penrose. “We are in the process of finalizing the written agreement, which we expect will include a mutual confidentiality clause.”
The flap over the brokers has been anything but private. A number of details have surfaced about the dispute, which stemmed from
Raymond James' hiring of several brokers from A.G. Edwards & Sons Inc. in 2007. At the time, Edwards was in the process of being acquired by Wachovia Securities LLC. A year later, Wachovia's parent company was bought by
Wells Fargo.
In papers filed with the U.S. District Court for the Middle District of Florida in Tampa,
Raymond James said a “clash of corporate cultures” caused many A.G. Edwards brokers to seek to leave Wachovia after the acquisition. But the company denied any wrongdoing.
Indeed,
Raymond James challenged the Finra award in federal court on the basis that Wells withheld key documents from arbitrators.
Wells denies that charge. In its own court filings, Wells said that some of the materials alleged to have been withheld were actually submitted into evidence.
In addition to
Raymond James, A.G. Edwards also named four brokers in its earlier arbitration claim with Finra, alleging the reps “diverted [Edwards] clients, employees, and confidential and proprietary information.”
After 17 days of hearings, the Finra arbitrators in February dismissed the claims against the individuals. But the panel found
Raymond James liable for $10.5 million in damages, $1.5 million in attorneys' fees, and $115,000 in costs.
