Robert Baird to Pay Wells Fargo $25 Million over “Wichita Raid”
A billion-dollar recruiting win in 2015 for Robert W. Baird & Co. has morphed into an embarrassing $25 million liability after an arbitration panel upheld Wells Fargo Advisors’ claims that Wisconsin-based Baird raided its branch in Wichita, Kansas.
Baird must pay almost the entire claim submitted by Wells Fargo, the panel ruled, including $10.9 million in compensatory damages and the same amount in punitive damages. One of the three arbitrators dissented from the punitive damage finding, although none explained their reasoning in the January 11, 2017, decision.
Four of the six brokers — Donald Barry, the mother-son team of Jill and Brian Docking, and Kevin McWhorter — were assessed between $115,000 and $161,000 apiece. Wells withdrew its claims again the remaining brokers.
Wells Fargo argued in its October 2015 claim that Baird engaged in a “conspiracy” and unfair competition in order to set up shop in what the firm described in a press release at the time as
The brokers collectively brought Baird “more than 150 years of experience,” the firm boasted at the time. It could not be determined how many brokers worked in the Wells office at the time, or what percentage of production the departing brokers represented.
Baird issued an arbitration counterclaim charging breach of the Protocol for Broker Recruiting — an agreement that allows brokers to take limited client information without fear of being sued — and an attempt by Wells to stifle competition, neither of which were addressed in the ruling.
“That panel is making a statement that you guys went beyond what you should have done,” said Kevin P. Conway, a securities attorney with Conway & Conway in New York. “To rise to the level that you award punitive damages, it really has to shock your conscious.”
Wells currently employs 17 brokers in its private client group office in Wichita, .
A Wells Fargo spokeswoman declined to comment. Calls to the Baird brokers were directed to a company spokesman, who did not return a call.
The award included $1.75 million of attorneys’ fees.