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Citi Ordered to Pay $4 Million to Financial Advisor

March 12, 2018

A Finra arbitration panel has awarded $4 million to a former Citigroup broker who accused the firm of terminating him so that his managers could take his book of business, AdvisorHub reports.

Christian Gherardi, who worked at various brokerage units at Citi (including Smith Barney, now part of Morgan Stanley) from 1996 until he got the axe in 2015, argues he was dismissed because the company wanted the $200 million he oversaw, his lawyer tells AdvisorHub.

Many of Gherardi’s clients were Latin American, and Citi slapped a moratorium on new non-U.S. accounts in 2015. As a result, Gherardi’s lawyer says the bank worried some of its foreign-leaning FAs could be lured away by rivals.

Finra arbitrators ruled that Citi must pay Gherardi $3.45 million in compensatory damages, $150,000 for “lost-quarter” trail fees for mutual-fund sales and an additional $396,000 in deferred compensation, AdvisorHub writes. Gherardi had originally sought $16.5 million in lost earnings, according to the website. The panel also recommended that his termination notice be changed to “terminated without cause” but didn’t go as far as ordering an expungement of the termination reason, AdvisorHub writes. Citi had cited personal and business conduct issues on his termination filing, according to AdvisorHub. The arbitrators also denied all claims against Gherardi’s former complex manager Michael Averett.

Meanwhile, a Wells Fargo Advisors broker has filed a Finra arbitration claim seeking more than $2 million in benefits and bonuses tied to the company’s “sunset” program, AdvisorHub tells us.

Harvey Baldinger, who started his financial services career at Wells Fargo predecessor Bache & Co. in 1973 and had worked at Wells Fargo ever since, does not say in his complaint that he had enrolled in the sunset program, but claims that Wells Fargo Advisors’ private client group president had said that the company would buy the books of business of retiring advisors, AdvisorHub writes.

Baldinger was hospitalized following a stroke in December 2015, and when he tried to come back to work in May 2017 was told that his book of business had been transferred to Fred Berens, who led a four-person team — in which Baldinger had a 20% stake — producing $7 million annually, according to the website.

According to Baldinger’s claims, his branch manager never responded to his inquiries regarding the company’s retirement-transition payment scheme, AdvisorHub says.

By Alex Padalka
  • To read the AdvisorHub article cited in this story, click here.
  • To read the AdvisorHub article cited in this story, click here.