(Dow Jones) A securities arbitration panel has ordered Raymond James Associates Inc. to pay $12.1 million to Wells Fargo Advisors LLC for alleged raiding.

The case involves 20 advisors who moved to Raymond James from four branches of A.G. Edwards & Sons Inc. in 2007. The moves, from two A.G. Edwards branches in Indiana and two others in Illinois and Arkansas, occurred after Wachovia Securities LLC announced it was purchasing A.G. Edwards in May 2007, said Anthea Penrose, a Raymond James spokeswoman.

Wachovia Securities allegedly lost $5.3 million in production from the departures of these advisors, according to Teresa Dougherty, a spokeswoman for Wells Fargo Advisors.

Wachovia Securities was acquired by Wells Fargo & Co., which filed the arbitration claim, at the end of 2008. The combined brokerage force became Wells Fargo Advisors in May 2009.

"The arbitrators clearly recognized the distinction between legitimate, permissible recruiting conduct versus raiding," Dougherty said.

Matthew Farley, a New York securities lawyer who represents brokerages, says determining whether raiding occurred often depends on circumstances such as the size of the firm, and whether a disproportionate amount of hurt is inflicted on the business. There is no bright-line legal test, he said.

"It is one thing to hire a rep and something else to hire a team, but going after an entire branch office can look abusive," Farley said.

The A.G. Edwards branches that were the subject of the claim had $5.94 million in revenue and managed $853 million in assets, Raymond James's Penrose said.

"Raymond James considers the award a miscarriage of justice and not based on the facts presented at the hearing, the applicable law, [or] standards in the industry," Penrose said in a statement.


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