Schwab loses $15 mln arbitration case against Morgan Stanley
Aug 26 (Reuters) - Charles Schwab Corp. has lost a $15 million arbitration case against Morgan Stanley, which it accused of improperly recruiting brokers from a Schwab San Francisco branch who left with confidential trade secrets.
The decision by a Financial Industry Regulatory Authority arbitration panel in San Francisco, dated Monday, ends a dispute that began in 2012.
Schwab alleged that Morgan Stanley had maliciously organized an "actionable raid" of its West Portal Avenue branch in San Francisco, according to the ruling. Schwab also accused Morgan Stanley of inducing Schwab brokers to breach their contracts.
A Schwab spokesman was unable to immediately comment. A Morgan Stanley representative was not immediately available to comment.
Claims involving the practice of so-called "raiding" are typically made when a firm loses 30 percent to 40 percent of the production - the amount brokers generate in revenue during a year - from a branch office to another firm in one swoop or over a short period of time, according to lawyers.
The ruling did not identify the brokers who left Schwab.
While the arbitrators denied Schwab's claims "in their entirety," they ordered Morgan Stanley to pay Schwab $72,000 in sanctions. The reasons for the sanctions are unclear.
The three-member panel, as is customary, did not explain the reasons for the decision. (Reporting by Suzanne Barlyn; Editing by Paul Simao)
- iPhone comes out of a 'bygone era', reviewers hail bigger handset
- Scots' support for independence lags on eve of referendum |
- Boeing, SpaceX win contracts to build 'space taxis' for NASA
- Fed may hint on rate-hike plan as it prepares for policy turn
- Islamic State campaign tests Obama's commitment to Mideast allies