Seven private wealth managers for Goldman have recently “jumped ship” to a company called Credit Suisse in order to get around pay restrictions on Wall Street and collect 8 digit bonuses. This has caused a major lawsuit to be filed against Credit Suisse claiming, among other things, that the company is trying to poach both Goldman employees and clients.
According to the lawsuit, David Greene (formerly of Goldman), was recently paid an $11 million bonus to leave his job at Goldman and join Credit Suisse. Greene had been with Goldman for nearly a decade managing money for over 140 clients with investment accounts totaling $1.8 billion. Greene earned an estimated $1 million during his lat year with Goldman.
The rise in poaching among Wall Street firms has triggered a plethora of recent disputes in the business world and has left many questioning the ethical and legal nature behind such practices.
A Credit Suisse spokesman denied to comment about the suit, and the company is standing by its guns claiming that they have done nothing wrong.
The several cited incidents that exist between Goldman and Credit Suisse are not clear cut cases of who did what to whom and why. The above case is murky at best and has a number of ethical issues that complicate things. For example, Goldman and Credit Suisse rent space in the same office building located on Peachtree Road in Atlanta, and there proximity to one another has opened the flood gates surrounding breaches in corporate confidentiality.
At the heart of the legal issue lies Goldman’s firm rules for protecting client information as underlined in their employee confidentiality agreement signed by every member of the Goldman team at the start of their employment. Goldman claims that former employees have breached that confidentiality agreement.
The recent poaching issues have forced Goldman to address the important confidentiality problems that accompany cooperate poaching practices. A few of the in-house legal issues Goldman recently addressed with reaming executives include, but are not limited too, restricting all employees taking about business on cellphones, which members of the Goldman team warn can be monitored by “hobbyist” and cooperate spies. Moreover, members of the Goldman team also suggested that all executives use code names whenever talking about clients or deals in public places.