Credit Suisse Will Not Pay Brokers Deferred Compensation
February 9, 2016 | Commercial Litigation & Class Actions
Credit Suisse Deferred Compensation
On September 13, 2015, it was announced that Credit Suisse intended to sell its U.S. private bank. On October 20, 2015, it was reported that Credit Suisse and Wells Fargo struck an exclusive recruiting arrangement to allow Credit Suisse’s U.S. brokers and clients to move to Wells Fargo by early 2016.
The next day, Credit Suisse announced that it intended to wind down its U.S. Domestic Private Banking Business because the business was not “positioned to compete in scale without significant investment or acquisition.” Additionally, Credit Suisse confirmed that it signed an exclusive recruiting arrangement with Wells Fargo to provide brokers and their clients in the U.S. Domestic Private Banking business an opportunity to transition to Wells Fargo by early 2016.
As Credit Suisse brokers began meeting with Wells Fargo, reports came out that many of Credit Suisse’s brokers were unhappy with Wells Fargo’s offer. Specifically, brokers were unhappy with an up to 13-year employment lockup, which is lengthier than the typical 9-year agreements, and a number of brokers questioned Wells Fargo’s capabilities in the high-net-worth client segment. The brokers’ concerns lead many to join other firms similar to Credit Suisse, such as Merrill Lynch, Morgan Stanley, and UBS, that have established groups of brokers who specialize in serving wealthy clients.
On December 21, 2015, Credit Suisse filed an arbitration claim with the Financial Industry Regulatory Authority alleging that UBS unfairly raised its U.S. Domestic Private Banking business. Currently, there has yet to be an outcome in the arbitration. According to multiple sources, Credit Suisse has notified brokers who did not join Wells Fargo, but instead joined another firm such as Merrill Lynch, Morgan Stanley, or UBS that they will not be paid their deferred compensation.
If you are an affected broker, you are entitled to your deferred compensation. The attorneys at Napoli Shkolnik PLLC have handled many similar cases for brokers who face the loss of their deferred compensation. We are happy to speak with any affected Credit Suisse brokers.
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