In the past two years, securities firms have doled out six- or seven-figure signing bonuses to entice brokers away from rival companies. But now that those bonus-laden brokers failed to make money for the firm or quickly moved on to the next job, Wall Street wants its money back, thank you very much. To be fair, they were probably using the same calculator that spits out those hundred-million-dollar golden parachutes for failing CEOs. Seventeen percent of arbitration awards this year from the Financial Industry Regulatory Authority have been for “promissory notes,” as the payments are called — the highest percentage in a decade. (Finra arbitration panels typically side with the brokerage firms.) UBS chief executive Robert McCann says, “It surprises me that in an industry that is all about trust, people would accept money from one firm and then walk on the obligation.” Hear that, brokers? You are sullying Wall Street’s good name.
WSJ: Signing Bonuses Haunt Wall Street; Finra Arbitrates [WSJ]