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UPDATE 2-Goldman sues former execs over Credit Suisse move
February 18, 2010 / 2:00 PM / 8 years ago

UPDATE 2-Goldman sues former execs over Credit Suisse move

* Goldman sues seven former Atlanta brokers - court papers

* Goldman accuses brokers of breaking non-compete pacts (Adds byline, dateline, details from complaint)

By Joe Rauch

CHARLOTTE, N.C., Feb 18 (Reuters) - Goldman Sachs Group Inc (GS.N) sued seven former wealth management division executives for courting Goldman employees and clients soon after quitting the bank to join rival Credit Suisse CSGN.VX.

Goldman, in a lawsuit, accused the Swiss bank of inducing the defection of the Goldman team in Atlanta, Georgia, with tens of millions of dollars.

Three investment professionals at the vice-president level, two associates and two managers left Goldman on Feb. 5 to join Credit Suisse.

The seven immediately began “pirating” Goldman clients and colleagues to join them at Credit Suisse, according to the suit, filed in federal court in Atlanta on Wednesday. The seven violated their non-solicitation agreements and stole confidential information, the suit said.

Credit Suisse and Goldman declined to comment on the matter.

Goldman’s lawsuit comes amid heated competition among the largest U.S. wealth management firms to poach advisers and their customers.

Credit Suisse’s Americas private banking head told Reuters earlier this month that he wants to grow the U.S. wealth management business from 400 advisers to 700 over the next few years. [ID:nN08205813]

Recently, the recruiting frenzy has led to legal fights. On Feb. 1 an industry arbitration panel ordered Raymond James Financial Inc (RJF.N) to pay $12.1 million to Wells Fargo & Co (WFC.N) for improperly raiding employees from four former A.G. Edwards & Sons branches.

According to the Goldman lawsuit, one of the seven defectors, David Greene, told Goldman Atlanta office head David Fox that Credit Suisse agreed to pay him $11 million to join the firm.

Greene was not immediately available for comment.

The other defendants listed in the complaint are Craig Savage, Andrew Thompson, Sharran Srivatsaa, John Pitt, Stephanie Dennard and Kim Tyson.

The seven began soliciting Goldman’s clients and employees on Feb. 6, a day after they resigned from Goldman, according to the suit.

Greene called Goldman Sachs Vice President Justin Berman on Feb. 8 at 6:15 a.m. and offered him $10 million to join Credit Suisse, the suit said.

Goldman also accused the defectors of telling Goldman clients that the defections had “destabilized” the Atlanta office, which is in the same building as Credit Suisse’s wealth managers.

Goldman’s Atlanta team advised 140 Goldman clients in several Southeast states, according to the filing.

The suit alleges that the departing advisers attempted to skirt non-solicitation agreements by having Dennard and Tyson -- who did not sign such agreements -- call former clients on behalf of the team. Clients were asked to contact Goldman advisers who were moving to Credit Suisse, the suit said.

The departing executives also targeted Goldman’s internal list of potential wealth management clients, another violation of their employment agreements, Goldman said.

Goldman asked the court to restrain the seven defectors from using Goldman information and order them to return documents.

The case is In re: Goldman, Sachs & Co. v. Greene et al, U.S. District Court, Northern District of Georgia, No. 1:10-cv-00453. (Reporting by Joe Rauch; Additional reporting by Sakthi Prasad in Bangalore, Catherine Bosley in Zurich and Joe Giannone in New York; Editing by Erica Billingham and John Wallace)

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