Securities Firm Alleges Raids on Talent, Sues Prudential : Brokerages: Irvine-based Liberty Capital Markets contends industry giant used unfair advantage to identify, lure 4 top salespeople.


A small securities company, joining a growing group of operations upset that major brokerage houses are raiding their talent, has sued giant Prudential Securities Inc. for $12 million, alleging that it lured away its four top salespeople.

Liberty Capital Markets Inc. accuses Prudential in a San Francisco Superior Court lawsuit of using their confidential working relationship to identify and hire Liberty's top producers, thus disrupting Liberty's business.

Prudential had been Liberty's agent in clearing all securities transactions, thus gaining access to customer activity and salespeople's performances, Doyle L. Holmes, Liberty's president, said in a prepared statement.

In addition, the Irvine bond broker and dealer contends that Prudential defamed it by suggesting in a pamphlet at a recent convention that Liberty was out of business, said Liberty's lawyer, Joseph L. Alioto, a former San Francisco mayor.

Prudential spokesman William J. Ahearn said he knew nothing about the alleged defamation, but he denied that his firm did anything wrong. Prudential recruited one of the four Liberty brokers two years ago, and the others approached Prudential about jobs 16 to 18 months ago, he said.

On the other hand, Prudential has asked a court to stop Dain Bosworth Inc. in Minneapolis from hiring any more of its employees. Dain Bosworth had lured 13 Prudential salespeople from the company's Bellevue, Wash., office in the past five months.

Liberty's suit, filed Monday, is one of a number of lawsuits filed recently against major brokerages accusing them of wrongly raiding smaller companies.

"In the industry, raids happen on a fairly regular basis," he said. "We don't normally pursue these matters much. Some companies go to arbitration, some go to court."

Top salespeople, he said, are being offered "significant" pay packages now, so more job switching is occurring, and that is probably leading to more arbitrations and lawsuits. Barnett Banks Inc. in Jacksonville, for instance, recently sued Smith Barney Shearson Inc. in federal court in Miami for allegedly luring away its top three salespeople and two assistants.

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