On November 14, 2019, two former Credit Suisse investment advisers represented by Lax & Neville LLP won a $1.6 million FINRA arbitration award against Credit Suisse Securities (USA) LLC for unpaid deferred compensation. This is the sixth FINRA panel to rule on claims arising from Credit Suisse’s refusal to pay its advisers more than $200 million in earned deferred compensation when it closed its US private bank. All six FINRA panels have found for the advisers and ordered Credit Suisse to pay the deferred compensation it owes.
The claimants, Richard J. DellaRusso and Mark L. Sullivan, were advisers in the New York branch of Credit Suisse’s US private banking division (“PBUSA”) and were terminated when Credit Suisse closed PBUSA. Credit Suisse took the position, as it has with hundreds of its former investment advisers, that Mr. DellaRusso and Mr. Sullivan voluntarily resigned and forfeited their deferred compensation. A three member FINRA Arbitration Panel determined that Credit Suisse terminated Mr. DellaRusso and Mr. Sullivan without cause and breached their employment agreements by cancelling their deferred compensation.
The FINRA Panel awarded Mr. DellaRusso and Mr. Sullivan compensatory damages totaling $1,235,817, which included 100% of their deferred compensation awards, 2015 deferred compensation, and severance. The FINRA Panel also awarded interest and, having concluded that the cancellation of deferred compensation violated the New York Labor Law, attorneys’ fees. See NYLL § 198(1-a). The FINRA Panel recommended expungement of Mr. DellaRusso’s and Mr. Sullivan’s Forms U-5, the termination notice a broker-dealer is required to file with FINRA. As with hundreds of their colleagues, Credit Suisse falsely reported that Mr. DellaRusso’s and Mr. Sullivan’s “Reason for Termination” was “Voluntary.” The FINRA Panel recommended that the “Reason for Termination” be changed to “terminated without cause.” The FINRA Panel also denied Credit Suisse’s counterclaims. To view this Award, visit 17-01406.
To discuss this FINRA arbitration Award, please contact Barry R. Lax, Brian J. Neville, Sandra P. Lahens or Robert R. Miller at (212) 696-1999.