WealthManagement Magazine

SSB Wins Two CAP Cases

Salomon Smith Barney has won two separate arbitrations related to its Capital Accumulation Plan. In Mary Elizabeth Whyte vs. SSB, Whyte claimed that the firm "breached their contract, converted funds and engaged in fraud and deceit in connection with withholding restricted Capital Accumulation Plan (CAP) stock and Equity Participation Plan stock," according to the Jan. 29, 2001 NYSE decision. In Charles

Salomon Smith Barney has won two separate arbitrations related to its Capital Accumulation Plan.

In Mary Elizabeth Whyte vs. SSB, Whyte claimed that the firm "breached their contract, converted funds and engaged in fraud and deceit in connection with withholding restricted Capital Accumulation Plan (CAP) stock and Equity Participation Plan stock," according to the Jan. 29, 2001 NYSE decision.

In Charles M. Fallon vs. SSB, Fallon sought "the return of Citigroup shares which were purchased under the respondent's Capital Accumulation Plan and then forfeited when he left the [the firm]."

In both cases, the former SSB employees' claims were denied.

Separately, the firm still faces several pending class action suits related to the CAP. Attorneys say the firm has also been quietly settling cases. The Fallon and Whyte cases appear to be some of the first CAP cases the firm has won.

In the Fallon case, however, decided Feb. 23, 2001, one of the three NYSE panelists submitted a two-page dissenting opinion, saying: "While it is true that a bonus is discretionary and forfeitable and may not be deemed wages under New York law, upon the facts of this case I find that the sum deducted from the stated Annual Compensation (Salary plus Bonus), constitutes wages."

The dissenting panelist, Stephen Schaedtler, said SSB's program was a mandatory plan, rather than a discretionary bonus plan, and therefore qualified as wages under the law. Schaedtler said Fallon was owed $297,000 in lost wages, and $370,000 in additional damages.

The NYSE did not identify the other arbitrators on the Fallon case.

The NYSE posts these and other arbitration awards at nyse.com/search/search.html.

Editor's note: For any comments regarding this article, or to suggest a story idea for RR Online or Registered Representative magazine, contact Editor in Chief Dan Jamieson at [email protected], Online Editor Rick Weinberg at [email protected], Online Managing Editor Cheryl Cooper at [email protected] or Senior Editor Michael Hayes at [email protected]

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