Jan 8 A former private wealth adviser for a unit
of Lehman Brothers Holdings Inc can keep a lucrative
signing bonus he received from the firm three years before it
collapsed, a securities arbitration panel has ruled.
Lehman lost its bid to recoup $1.8 million from William
Gourd, who joined the firm in early 2005, according to a ruling
this week by a Financial Industry Regulatory Authority
arbitration panel. A Lehman spokeswoman declined to comment.
Lehman Brothers Holdings Inc has been pursuing roughly 50 of
its former licensed securities professionals to return portions
of the bonuses they received when hired. The firm, which filed
for bankruptcy in 2008, emerged from the process in March 2012
as an entity that liquidates Lehman assets to repay creditors.
Signing bonuses, often referred to as 'employee forgivable
loans' are paid by firms to brokers and other licensed
securities professionals up front and structured as loans
forgiven over time, typically a seven-to-10-year period. The
amount varies and reflects the employee's anticipated future
compensation based on past performance.
Brokers who leave the firm before the loan term is over must
return part of the payment. That was case for many Lehman
brokers who lost their jobs after the company filed for
bankruptcy and Barclays PLC bought its U.S. brokerage
Arbitrators rarely rule in favor of brokers who try to keep
their bonus money after leaving a firm. The Lehman situation,
however, is unusual because brokers departed because of the
Outcomes in Lehman's efforts to claw back bonuses have been
mixed. Arbitrators have ruled in its favor in some cases, but
allowed employees to keep their bonuses in others. It is unclear
how many cases have been settled.
Lehman filed its arbitration case against Gourd in 2012,
alleging that he breached a contract with the firm, according to
the ruling, dated Monday. Gourd's original bonus was over $2
million, according Daniel Dwyer, a lawyer in Boston who
The case hinged on a clause in the bonus contracts that
required employees to repay amounts they owed on the bonuses if
they left the firm. "Nobody left Lehman," Dwyer said in an
interview. "On the contrary, the people who stayed to the bitter
end were loyal employees," he said.
The arbitration panel, however, did rule against Gourd in a
counterclaim he filed seeking $5.5 million in damages, which
Dwyer said included unpaid commissions and restricted stock.
"The counterclaims were legitimate, but we understood we had an
uphill battle there," Dwyer said.
Gourd, now a private wealth adviser for a unit of UBS AG
in Stamford, Connecticut, declined to comment on the