By James Langton

(November 30 – 17:20 ET) – The latest broker-raiding lawsuit has pit RBC Dominion Securities against Merrill Lynch Canada and 10 former DS brokers in Cranbrook, B.C.

Canada Stockwatch is reporting that DS has filed a $6 million lawsuit over the defection of the 10 brokers, seeking $5 million in exemplary and aggravated damages, and $1 million in punitive damages. “Apart entirely from the very substantial compensatory damages to which the plaintiff is entitled by reason of the defendants’ unlawful conduct, the plaintiff states that the defendants’ conduct has been of such a calculated, intentional and predatory nature as to justify the award of substantial sums by way of aggravated, exemplary and punitive damages.”

The allegations have not yet been proven and statements of defence have yet to be filed. These suits rarely make it to trial, but the filing of them seems to be on the upswing nonetheless. Courts do not appear to be ruling consistently in favour of brokers or firms.

Earlier this year, Investors Group launched a sweeping suit against Berkshire Securities Inc., alleging that it had engaged in a systematic raiding campaign. One of the fundamental issues that has yet to be resolved by the courts is who owns the client — the broker or the firm.

“DS recognizes the right of any branch manager or investment adviser to leave its employ for a competitor, provided that the branch manager or investment adviser gives DS a reasonable opportunity to persuade any affected clients to remain with DS,” says the Stockwatch story. DS is seeking an injunction to prevent the departed brokers from using any information acquired while at DS.