Calloway Investments

Regulators have dismissed the latest claims of raiding and unfair competition made by Wachovia Securities against St. Louis-based brokerage, Stifel Nicolaus & Co. Inc., and ordered Wachovia to pick up the case’s tab.

A Financial Industry Regulatory Authority arbitration panel in South Carolina ordered Wachovia — now a owned by Wells Fargo & Co. — to pay $1.1 million in attorney’s fees, $73,000 in hearing fees and more than $15,000 in damages to the brokers who left A.G. Edwards in South Carolina for Stifel in January 2008 after Charlotte-based Wachovia bought A.G. Edwards in 2007 for $6.9 billion.

Last year, Wachovia accused Stifel and four of its brokers — Frank Brand, Stephen Jones, Marvin Slaughter and George Stukes — of breach of contract, misappropriation of trade secrets, breach of fiduciary duty, raiding and unfair competition, according to FINRA.

Stifel and its brokers denied the allegations.

In its decision released last week, the three-person arbitration panel also directed Wachovia to tell a federal court in South Carolina that sworn statements from individuals representing Wachovia in support of its request for a temporary restraining order against Stifel “may contain materially false representations of fact,” and that Wachovia lawyers used a video tape that does not support their allegations.

San Francisco-based Wells Fargo & Co. (NYSE: WFC) bought Wachovia earlier this year, and the St. Louis-based brokerage unit is now called Wells Fargo Advisors.

Wells Fargo Advisors said Tuesday it was “very disappointed by this decision.”

“We believe the case was wrongly decided and we intend to move to vacate the award,” Wells spokeswoman Teresa Dougherty said. She declined to respond to additional questions about FINRA’s order.

Ron Kruszewski, chairman and chief executive of Stifel Financial Corp, the parent company of Stifel Nicolaus, said FINRA’s decision speaks for itself.

This isn’t the first time the local brokerage companies have clashed over employees. In 2007, A.G. Edwards sued one of its top West Coast executives who resigned to join Stifel.

At the time, Kruszewski said A.G. Edwards was trying to intimidate employees whose jobs are uncertain and who may want to join his firm.

Charlotte Business Journal - by Kelsey Volkmann St. Louis Business Journal

This entry was posted on Thursday, December 31st, 2009 at 1:40 pm and is filed under Real Estate. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.