Facts

Southwest Securities Inc. n/k/a Hilltop Securities Inc. filed a claim against Wyatt Farmer; Harvey Frank; Andrew Harvey; Barry Kersh; Brett Levinson; Carla Osbourne; Stifel, Nicolaus & Co. Inc., related to the individual respondents' former employment with Southwest and subsequent employment with Stifel.

CLAIMANT'S CONTENTIONS: Claimants asserted various causes of action against various respondents, including, violation of the protocol for broker recruiting, federal and California computer fraud, misappropriation of confidential client information and proprietary business Information, tortious Interference with prospective economic advantage/business relations, unfair competition, violation of California Business and Professions Code Section 17200, conversion, theft, breach of fiduciary duty, aiding and abetting breach of fiduciary duty, and breach of contract.

Claimant also asserted and prosecuted a claim for raiding its employees.

RESPONDENTS' CONTENTIONS: Respondents denied the allegations and asserted various affirmative defenses.

Damages

Southwest Securities requested more than $3.88 million in compensatory damages, $1 million in consequential damages each for documents destroyed and reputational damage, $250,000 in consequential damages for solicitation, $11.4 million in punitive damages, and about $1 million in attorney fees and costs.

Result

The FINRA Panel found respondents Harve, Levinson, Frank, Farmer, and Osbourne liable to Southwest Securities in varying amounts. The Panel denied Southwest Securities' claims against Stifel in their entirety. Harvey was liable for $35,000 in compensatory damages and $15,000 in punitive damages plus interest. Harvey was also liable for $60,000 in attorney fees and $30,000 in costs. Levinson was liable for $35,000 in compensatory damages and $65,000 in punitive damages plus interest. Levinson was also liable for $60,000 in attorney fees and $30,000 in costs. Frank was liable for $25,000 in compensatory damages plus interest. Frank was also liable for $20,000 in costs. Farmer was liable for $15,000 in compensatory damages and $5,000 in punitive damages plus interest. Farmer was also liable for $10,000 in costs. Osbourne was liable for $5,000 in punitive damages plus interest. Osbourne was also liable for $10,000 in attorney fees and $10,000 in costs.

Other Information

ARBITRATORS: Evan A. Gould, presiding chairperson; Thomas J. Doherty; Ann Elizabeth DiGiorgio.