Downtown investment management firm Hunter Associates has been ordered to pay $2.4 million to Janney Montgomery Scott after it was accused of recruiting employees from Janney's Salem, Ohio, office.
Arbitrators hired by the Financial Industry Regulatory Authority, or FINRA, signed the decision earlier this month. FINRA is a Wall Street-funded regulator that oversees about 4,300 brokerage firms.
The decision also held Robert S. McCulloch III, a former Janney employee who now works for Hunter, liable for the $2.4 million in compensatory damages.
Hunter chairman David Hunter said options for appealing FINRA arbitration decisions are limited but are being considered.
Janney issued a statement saying the decision "sends the message that a branch manager has a fiduciary responsibility to his or her firm and should not engage in improper conduct designed to move an entire branch office to a competitor."
According to filings the firms made this year with the Securities and Exchange Commission, Hunter had 15 employees and managed $663.8 million in 918 accounts while Philadelphia-based Janney had 1,810 employees and managed $10.9 billion in 36,059 accounts.
Janney filed a complaint against Hunter with FINRA in May 2011, accusing H unter of raiding the Salem office and interfering with its business. The complaint said Hunter opened its own office in the town after hiring Janney's management team and financial advisors.
Hunter filed a complaint of its own, alleging among other things that Janney failed to pay Mr. McCulloch deferred compensation and published false and defamatory statements about him. The three arbitrators dismissed Hunter's complaint.
Len Boselovic: firstname.lastname@example.org or 412-263-1941.