Close Close
Sign In
Newsletters
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards
Podcast Center Video Center Webcasts Resource Center Events
About ThinkAdvisor Contact Us Advertise With Us Asset & Logo Licensing Sitemap Terms of Service Privacy Policy Copyright © 2024 ALM Global, LLC. All Rights Reserved.
ThinkAdvisor
Raymnd James logo

Regulation and Compliance > Federal Regulation > FINRA

Raymond James, Rep to Pay $20M Over Recruiting ‘Raid’ on Wells Fargo Office

By Melanie Waddell

X
Your article was successfully shared with the contacts you provided.

A Financial Industry Regulatory Authority arbitration panel has ordered Raymond James and a former Wells Fargo advisor to pay Wells Fargo Advisors nearly $20 million, the broker-dealer regulator announced Thursday.

According to the award, Raymond James and the former advisor, Kent Jackson Rhoades, are jointly and severally liable to pay Wells Fargo Advisors $15.3 million in compensatory damages. Rhoades must also pay $3.5 million in attorneys’ fees and another $847,000 in other costs.

Raymond James is also required to pay $1 million in punitive damages.

Wells Fargo Advisors asserted that it “was damaged” by a “coordinated raid” conducted by Raymond James and Rhoades of a branch office in Mountain Home, Arkansas, “which targeted all of the employees of the Mountain Home Branch and resulted in its closure.”

Raymond James recruited Wells Fargo advisors away and opened a new branch office in the same town. The entire team left Wells Fargo and opened a new office with a Raymond James sign.

The team joined Raymond James in late 2018 with six advisors — Rhoades, Jan Schmeski, Mike Stockton, Steve Bettenhausen, David Matty and Logan Stone — six other staff members and some $560 million in assets, they announced at the time.

Wells Fargo Advisors claimed “unfair competition, breach of contract, breach of fiduciary duty, aiding and abetting breach of fiduciary duty, conspiracy, tortious interference with actual and prospective business advantage and/or relationship, tortious interference with contractual relations” as well as violations of FINRA rules and unjust enrichment.

Wells Fargo Advisors said in a statement that it was “pleased with the outcome and appreciates the arbitration panel’s recognition of the damages caused by this conduct.”

Initial claims against Bettenhausen, Matty, Schmeski, Stockton and Stone were withdrawn Aug. 16, 2022, according to the award. Bettenhausen and Matty are no longer registered as brokers or investment advisers, according to FINRA’s BrokerCheck.

Melanie Waddell

@Think_MelanieW

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.