A U.S. federal judge has signed off on the order granting Credit Suisse Group AG’s motion to dismiss a lawsuit against the Zurich-based bank on Thursday. The complaint accused the bank of withholding up to $300 million of compensation from U.S.-based brokers.
According to a report from Reuters U.S. District Judge William Orrick ruled that the plaintiff, financial advisor Christopher Laver, was bound by an arbitration agreement and could therefore not pursue his proposed class action on behalf of approximately 200 brokers.
The judge suggested details of arbitration should be worked out in New York, which is where Suisse believed the case belonged, instead of San Francisco.
Credit Suisse has said it was happy with the decision, while Laver’s lawyer did not immediately respond for comment.
Complaint against Suisse
The lawsuit, which was filed earlier this year in February by Laver, sought to represent hundreds of employees who claimed the bank owed them compensation when they were unable to move to Wells Fargo & Co, which was given exclusive recruiting rights after Credit Suisse closed its private banking unit in 2015.
Due to the agreement between the two banks, Credit Suisse maintained a “facade” that the financial advisers had voluntarily resigned and therefore weren’t entitled to a portion of their annual income, the complaint alleged.
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Robert Nelson, a lawyer for Laver said in an interview: “they were told if you went to Wells you could keep your deferred compensation, and if not you were out of luck.”
However, Credit Suisse has stated that it was standard industry practice for brokerages such as Wells Fargo to pay the deferred compensation when the employee was re-hired.
A spokeswoman for Credit Suisse, Karina Byrne, said: “Plaintiffs cannot be paid the same money twice.”
Wells Fargo has not been accused of any wrongdoing and was not a defendant.
No stranger to lawsuits
The Swiss bank is no stranger to lawsuits. There have been multiple occasions where the bank’s conduct has been called into question. Suisse has been accused of unlawfully conducting $1 billion in write-downs, it has been fined for multiple regulatory lapses in Hong Kong and fined $135 million for rigging the FX market.