Wells Fargo Settles Deferred Comp Claims; Plaintiff Lawyers Rejoice
Wells Fargo finally threw in the towel when fighting deferred comp claims made by former advisors/employees of the firm. In a settlement just announced, Wells Fargo (and it should be said, plaintiff lawyers) came to an agreement to halt litigation and finalize a settlement that need only to be approved by the judge presiding over the case.
Via Bloomberg Law:
“Wells Fargo & Co. will pay $79 million to settle a class action covering more than 1,000 former financial advisers who said they were wrongly forced to forfeit deferred compensation when they left the company, the parties told a federal judge in South Carolina.”
“The Jan. 31 settlement resolves a lawsuit by former financial adviser Robert Berry, who said he gave up nearly $200,000 in deferred compensation when he resigned from the company in 2014. Berry says the plan’s forfeiture provision violated the Employee Retirement Income Security Act, while Wells Fargo maintained that the plan was largely exempt from ERISA as a “top hat” plan for high-level employees.”
The interesting upshot here, and of note to anyone who has ever hired an attorney and enjoyed the process – of the $79 milly, the attorneys will cash in $23.7 of it. Yippee!!
This particular deal will be looked at very closely as former Credit Suisse advisors have pending litigation and claims against their former firm that shuttered in hopes of selling/transitioning their advisors to Wells Fargo. Fully a third of those advisors went to UBS, while others went to firms other than Wells.
Those claims could outstrip this particular agreement, and Credit Suisse would do well to take a good hard look at whether or not a reasonable settlement makes sense at this point. The plaintiff’s lawyers in that case are probably all smiles reading the WF settlement today.
The ensuing legal back and forth should be interesting. Time will tell.