Credit Suisse kept $300 million from brokers in closed U.S. unit: lawsuit

From Reuters - February 8, 2018

(Reuters) - A new lawsuit accuses Credit Suisse Group AG of withholding up to $300 million of pay from U.S.-based brokers who refused or were unable to move to Wells Fargo & Co after their private banking unit was shuttered in 2015.

In a complaint filed on Wednesday, Christopher Laver said Credit Suisse canceled deferred compensation owed to him and other brokers who did not join Wells Fargo under a recruiting agreement between the banks, by maintaining a facade that they had voluntarily resigned en masse.

Laver said Credit Suisse knew many brokers would not join Wells Fargo because its business and client base were different but entered the recruiting pact because a sale of the unit would have constituted a change of control requiring the payments.

Credit Suisse should not be able to avoid its obligation to compensate the advisers fully and fairly by claiming they resigned when, in fact, Credit Suisse simply ceased operating this business, the complaint said.

Laver lives near San Francisco, worked at Credit Suisse for 13 years and has worked for another Swiss bank, UBS, since leaving. He has been in financial services since 1981.

The proposed class-action complaint filed in the U.S. District Court in San Francisco seeks unspecified damages for roughly 200 brokers.

Credit Suisse spokeswoman Karina Byrne the lawsuit had no merit and that it is standard industry practice for Wells Fargo and other brokerages to pay the deferred compensation at issue to new hires.


Continue reading at Reuters »