After almost eight years, Oppenheimer & Co has lost its battle to force Citigroup Inc
A Financial Industry Regulatory Authority panel rejected claims from Oppenheimer that Citigroup conducted an unlawful raid on its brokerage business shortly after it was sold to New York-based Fahnestock Viner Holdings Inc in 2003.
The panel also ordered Oppenheimer to pay almost $100,000 in arbitration fees accumulated since the firm first filed its complaint in April 2003, according to the decision posted on FINRA's website on Wednesday.
The claim stems from Canadian Imperial Bank of Commerce's
Shortly after the sale, nine financial advisers at Oppenheimer's Los Angeles office left to join Citigroup's Smith Barney brokerage unit.
At the time, the advisers represented nearly 30 percent of the overall fees and commissions generated by Oppenheimer's brokerage business, according to the ruling.
Oppenheimer claimed Citigroup used Jeffrey Bischoff, an internal recruiter who previously worked at Oppenheimer, to target his former colleagues. He offered them higher than average recruitment deals in a bid to harm Oppenheimer's business, the firm claimed.
Oppenheimer accused Citi of, among other things, raiding and predatory practices, unfair competition and misappropriation of confidential information. It was seeking monetary damages of over $18 million, according to the ruling.
I'm amazed this took so long, Bischoff told Reuters. The Fahnestock purchase of Oppenheimer was unsettling to many top advisers at Oppenheimer ... and a lot of people went to a lot of different places.
A Citigroup spokesman said the company was pleased with the panel's decision Citi's actions were appropriate.
An Oppenheimer spokesman said the firm was disappointed by the decision.
We still believe that our firm was harmed by the actions of Citigroup, he said. We believe the arbitrators either ignored or disregarded important ... evidence and testimony.
(Reporting by Helen Kearney; editing by Dave Zimmerman and Andre Grenon)