FINRA orders Baird to pay $23.5 million

Milwaukee firm to pay Wells Fargo for hiring away brokers

Robert W. Baird & Co. Inc.'s headquarters is in the U.S. Bank Center in downtown Milwaukee.

Milwaukee-based Robert W. Baird & Co. Inc. has been ordered by the Financial Industry Regulatory Authority to pay $23.5 million to Wells Fargo Advisors LLC for “raiding” brokers from Wells Fargo’s Wichita, Kansas office and hiring them on at Baird.

Robert W. Baird & Co. Inc.'s headquarters is in the U.S. Bank Center in downtown Milwaukee.
Robert W. Baird & Co. Inc.’s headquarters is in the U.S. Bank Center in downtown Milwaukee.

A FINRA arbitration panel on Jan. 13 ordered Baird to pay Wells Fargo $10.9 million in compensatory damages and $10.9 million in punitive damages, as well as $30,000 in costs and $1.8 million in legal fees. Individual brokers Donald Barry, Brian Docking, Jill Docking and Kevin McWhorter also were ordered to pay compensatory damages.

In its complaint, Wells Fargo claimed unfair competition, breach of contract, breach of fiduciary duty, aiding and abetting breach of fiduciary duty, conspiracy, tortious interference with actual and prospective business advantage and/or relationship, tortious interference with contractual relations, violation of FINRA rules and conduct and unjust enrichment resulted from Baird’s raid.

Baird denied the allegations, and spokesman John Rumpf released the following statement responding to Friday’s ruling:

“We strongly disagree with what is asserted in this situation and with the findings and are extremely disappointed in the size of the award. In terms of potential impact on our financial results, we will have record revenues for 2016 and expect operating income in 2016 to be in line with 2015, which was a record year.”

Rumpf declined to comment further.

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Molly Dill, former BizTimes Milwaukee managing editor.

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