Credit Suisse Faces Lawsuit Over Deferred Pay For Brokers
A former Credit Suisse broker is suing the firm for allegedly withholding up to $300 million in deferred pay from the U.S.-based reps who didn’t move over to Wells Fargo after the unit’s closing in 2015, Reuters reports.
Christopher Laver, who worked for Credit Suisse for 13 years, alleges in his complaint that the firm maintained a “facade” that he and other brokers resigned voluntarily when they opted against joining Well Fargo under the agreement reached between the two firms, according to the newswire.
Laver alleges Credit Suisse was fully aware that many reps weren’t planning to go to Wells Fargo due to differences in the two firms’ businesses and client bases, Reuters writes. But the Swiss-based company signed the recruiting agreement because selling the unit outright would have been a “change of control” situation requiring the firm to make the payments to its reps, according to the suit filed in the U.S. District Court in San Francisco and cited by the newswire.
In October 2015, Credit Suisse signed an exclusive deal with Wells Fargo for around 275 of its advisors in 13 U.S. offices that Credit Suisse was planning to close, Reuters writes.
The brokers were also told they would be able to keep their deferred compensation only if they went to Wells Fargo, Robert Nelson, a lawyer for Laver, tells the newswire. Laver has worked for UBS ever since leaving Credit Suisse, Reuters writes.
A Credit Suisse spokeswoman tells the newswire that the suit has no merit and that it’s standard practice for Wells Fargo and other brokerages to cover the deferred compensation of new hires in such instances.
“Simply put, the plaintiff here is looking to be paid the same money twice,” Karina Byrne tells Reuters.