US BROKERAGE Oppenheimer & Co has lost its eight-year battle to force Citigroup to pay over $18m (£11.6m) for luring away nine of its top financial advisers.
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 firm 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's sale of its Oppenheimer brokerage business to Fahnestock in 2003. Fahnestock subsequently changed its name to Oppenheimer Holdings Inc.
Shortly after the sale, nine financial advisers in Oppenheimer's Los Angeles office left the firm to join Citigroup's Smith Barney brokerage unit.
At the time, the advisers represented nearly 30 per cent of the overall fees and commissions generated by Oppenheimer's brokerage business, according to the ruling.
Oppenheimer claimed that 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 $18m, 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 that the company was pleased with the panel's decision that Citi's actions were appropriate.
Oppenheimer did not immediately return calls for comment.
City A.M. Reporter