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Wachovia Somewhat Stiffed by Stifel Nicholas In $7 Million Raiding Case
Written: April 5, 2012

Ahoy mateys. Arrrrrrh. Let's raid that brokerage office.

Depending on which side is telling the story, Claimant Wachovia Securities had this office in lovely Tulsa, OK.  At some point in time, it appears that the Tulsa office had about half the number of financial advisors and half the customer business that it had previously enjoyed.

Oh boy, going from X to one-half X isnít a happy development.  Not in terms of FAs. Not in terms of revenue.

If you ask Wachovia what caused this diminution in bodies and dollars, they would point a wagging, angry finger at Respondent Stifel Nicholas & Company and tell you about how their office had been ďraided.Ē  You might also hear accusations about 100 confidential customer files that Stifelís newly hired employees took.

In a Financial Industry Regulatory Authority (ďFINRAĒ) Arbitration Statement of Claim filed in Aprill 2009, Claimant Wachovia Securities asserted causes of action for unfair competition; tortious interference; conversion; and misappropriation of confidential  information.  Eventually, Claimant sought:

  • $5.3 million in  compensatory damages plus interest;
  • $1,656,561.50 in attorneysí fees;
  • $74,124.16 in costs;
  • $158,240.00 in witness fees; and
  • Unspecified punitive damages.

Also, Claimant sought a permanent injunction against future Stifel raids of Wachovia.  In the Matter of the Arbitration Between Wachovia Securities, LLC, Claimant, v. Stifel Nicholas & Company, Inc., Gary King, and Sally Murray,Respondents (FINRA Arbitration 09-02191, March 29, 2012).

Respondents Stifel Nicholas, Gary King, and Sally Murray generally denied the allegations and asserted affirmative defenses.


In April 2009, a court denied Claimant Wachoviaís request for a temporary injunction.

In July 2010, Claimant Wachovia  dismissed without prejudice all claims asserted against Respondents King and Murray.

At the start of the arbitration hearing. Claimant withdrew its request for permanent injunctive relief.


The FINRA Arbitration Panel found Respondent Stifel Nicholas  liable and ordered it to pay to Claimant Wachovia $70,000 in compensatory damages.

Bill Singerís Comment

Alas, not with a bang but with a whimper.  Following some three years of litigation,  Claimant Wachovia walks away with a lousy $70,000 ó not even close to the millions in original demands.

What the hell went on here?  Seriously ó is it asking that much for just a modicum of facts so as to make this intelligible?  Itís hard to justify the awarding of $70,000 without concluding that Wachovia likely proved that it had been victimized by Stifel Nicholas. Was the award compensation for a raid?  Was the award compensation for:

  • unfair competition;
  • tortious interference;
  • conversion; and/or
  • misappropriation of confidential  information?

I dunno and sure as hell canít figure it out from this sparsely worded Decision.

While FINRA Arbitration Decisions have no precedential value and each stands only on the facts for the case at issue, thatís no excuse for the issuance of awards that donít make sense.  Supposing Merrill Lynch, Morgan Stanley, JP Morgan, or some other industry powerhouse has its eyes on a competitorís branch or vice versa ó any rough guidelines here as to what arbitration panels may like and not like? Not as far as I can tell.


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