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Regulation and Compliance > Federal Regulation > FINRA

Wells Fargo Ordered by Arb Panel to Pay Ex-Credit Suisse Rep Over $987K

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What You Need to Know

  • A panel of arbitrators in New York ordered Wells Fargo to pay damages to an ex-Credit Suisse Securities broker.
  • The rep accused the wirehouse of helping Credit Suisse steal his deferred compensation after winning exclusive rights to recruit Credit Suisse advisors.
  • The award was much less than the requested compensatory damages of at least $5.5 million the claimant requested.

A three-person panel of arbitrators in New York ordered Wells Fargo Advisors and Wells Fargo Clearing Services to pay $987,300 in compensatory damages to a former Credit Suisse Securities advisor/broker who had accused the Wells Fargo divisions of “aiding and abetting Credit Suisse’s scheme to steal” the deferred compensation of him and other Credit Suisse relationship managers.

The award, however, was significantly less than the claimant, Anthony Aris Dertouzos, had requested.

Dertouzos was with Credit Suisse from 2008 until 2015, according to his report on FINRA’s BrokerCheck website. He joined Morgan Stanley in late 2015, after Wells Fargo Advisors said it won the exclusive right to recruit advisors with Credit Suisse’s private banking unit in the U.S., which was closing.

By the time Wells Fargo stepped in to start recruiting, however, several Credit Suisse advisors had either started speaking with other firms or jumped ship entirely.

In his Financial Industry Regulatory Authority arbitration dispute, Dertouzos also asserted negligent misrepresentations, fraud, negligence and unjust enrichment by Wells Fargo.

In his statement of claim, Dertouzos requested compensatory damages of at least $5.5 million; “compensatory damages to be proven at trial in the event that Claimant does not recover 100% of the deferred compensation owed to him by Credit Suisse”; interest from Oct. 21, 2015, until the award was satisfied; and costs of the arbitration to be assessed against Wells Fargo.

Also named as respondents in the claim were David Carroll, David John Kowach, and Mary Tabb Mack of Wells Fargo.

In its statement of answer, Wells Fargo requested that the claim be denied in its entirety and dismissed with prejudice, and the panel award it legal fees.

The arb panel decided the Wells Fargo divisions were “jointly and severally liable for and shall pay” Dertouzos the sum of $987,300.00 in compensatory damages. But the claims against Carroll, Kowach and Tabb Mack were denied.

The panel also assessed a total of $41,662.50 of the FINRA Dispute Resolution Services hearing session fees jointly and severally to the respondents. The panel assessed $42,637.50 of the hearing session fees to Dertouzos.

The decision was posted on FINRA’s website Tuesday. Public arbitrators James M. Rhodes and David John Reilly signed the decision May 13 and nonpublic arbitrator Emad A. Zikry signed it May 14.

Wells Fargo and Kevin T. Hoffman, a lawyer in Greenwich, Connecticut, who represented Dertouzos, didn’t immediately respond to requests for comment on the decision Friday.

(Photo: Adobe Stock)