Canadian broker who led defection is ruled liable

Thu Oct 9, 2008 6:08pm EDT
 
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VANCOUVER, British Columbia (Reuters) - A branch manager who orchestrated a defection of investment advisors to another company is liable for the lost earnings of his former employer, the Supreme Court of Canada ruled on Thursday.

The Supreme Court reinstated a C$1.5 million ($1.3 million) award against Don Delamont, who, with other advisors left RBC Dominion Securities, in Cranbrook, British Columbia, without warning in 2000 and switched allegiance to an office of Merrill Lynch Canada.

The top court in a 6-to-1 decision, upheld a trial judge's ruling that Delamont acted in bad faith and owed RBC the money its Cranbrook office could have expected to have earned over five years. It said Delamont's action "effectively hollowed out" the RBC Dominion office.

The advisors took most of their clients with them, and in the weeks before the defection copied and transferred the office's financial records.

Delamont and the other advisors were also ordered to pay C$40,000 for failure to give notice, which was the amount RBC could have expected to earn from them during the 2-1/2 week notice period.

Merrill Lynch Canada sold its retail brokerage operations to Canadian Imperial Bank of Commerce in 2001.

($1=$1.15 Canadian)

(Reporting Allan Dowd, Editing by Peter Galloway)