Lehman Brothers Holdings Inc suffered its first loss in the firm's effort to win back portions of upfront bonuses paid to former brokers, according to regulatory documents released on Wednesday.

Former New York-based broker Jennifer Mitchell does not have to pay back the bonus she received when she joined Lehman three years before the investment bank filed for bankruptcy in September 2008, said a Financial Industry Regulatory Authority arbitration panel.

Lehman has said it is pursuing roughly 50 former brokers, some of who were hired less than a year before the bankruptcy filing, to return portions of bonuses they received when hired. The firm has won four cases and has been awarded nearly $4 million from the four brokers.

The payments, often referred to as 'employee forgivable loans,' are paid up-front and structured as loans forgiven over time, typically a seven-year period. Brokers who leave the firm, or whose employment is terminated, before the loan term is over must return part of the payment.

They're really golden handcuffs, Mitchell's lawyer, David Robbins, said. Even if you die or become disabled, you owe the balance.

In the case of Lehman brokers, their employment ended when the company filed for bankruptcy and Barclays PLC bought its U.S. brokerage arm.

SURPRISE VICTORY

Robbins, who has worked as a lawyer in the securities industry for 35 years, said the decision came as a surprise. Firms prevail in roughly 95 percent of all such cases, he said.

I really feel like this one was different, he said.

Robbins said he could not specifically elaborate on the panel's decision and FINRA documents did not disclose the details of the arbitration panel's decision.

In Mitchell's case, Lehman first requested compensatory damages totaling $176,000 in interest, costs and attorney's fees. The firm later amended the amount to $258,084.12 at the close of the hearing.

New York-based attorney Neil Sussman, a former in-house attorney at Lehman, represented the firm in the Mitchell case and in the other four broker bonus cases.

Robbins said he found out about the ruling from Sussman.

I was sitting at my desk and he sent me an e-mail congratulating me, Robbins said.

Lehman declined to comment about the case.

(Reporting by Ashley Lau; Editing by Jennifer Merritt and Chelsea Emery)

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