(Dow Jones) Oppenheimer & Co. has lost an eight-year-old feud in which it sought $18 million from Citigroup Inc. for allegedly enticing nine of its top financial advisors to leave.

A Financial Industry Regulatory Authority arbitration panel disagreed with Oppenheimer's arguments that Citigroup illegally raided its brokerage business in 2003, shortly after it was sold to Fahnestock Viner Holdings. Fahnestock later became Oppenheimer Holdings Inc., following a name-change.

Oppenheimer filed the case in 2003, accusing Citigroup of raiding and predatory practices and tortious interference with its business relationships, among other things, according to the ruling. The case involved nine former Oppenheimer advisors in a Los Angeles office who joined Smith Barney, then Citigroup's retail brokerage unit.

Citigroup, it said, hired away a group of advisors responsible for 30% of its total revenue production in that office and violated its own internal recruiting standards by paying more in hiring bonuses than it had historically, among other things. Oppenheimer also accused one of its former advisors, who later joined Citigroup, as acting as a "mole" for Citigroup while still working at Oppenheimer.

The Finra panel concluded that Oppenheimer failed to demonstrate that "any defined or even articulable principle or standard of trade was violated in this case," according to a 17-page decision dated Jan. 4 that included a rare explanation of reasons for the panel's ruling.

It was well-known throughout the office that many of the advisors in the Oppenheimer office at the time were being recruited by more than one firm, the panel wrote. Oppenheimer's "blatant assumption" in the case is that the firm's advisors were "somehow property or chattel belonging to it and it alone," the panel wrote. That assumption "ignores" advisers' rights to "change their employment for any legal reason," it wrote.

Oppenheimer accused Citigroup of using Jeffrey Bischoff, then an in-house Citigroup recruiter, to lure former colleagues he had known during a stint working at Oppenheimer from 1996 to 1999. Bischoff told Dow Jones Newswires on Thursday that he was one of many recruiters who called their advisors at the time because of the change in ownership. "It was simply business. These people were going to leave anyway," he said.

The Finra panel, in addition to rejecting Oppenheimer's claims, also required the firm to pay the full $100,000 for forum fees in the case. Forum fees are split equally between parties in many cases, say lawyers.

Oppenheimer is "disappointed" in the decision and still believes the firm "was harmed by the actions of Citigroup," a spokesman said. The panel either ignored or disregarded important evidence and testimony, he added.

A Citigroup spokesman said it acted appropriately in the hirings and is pleased with the decision.

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