Anticipating a swift recovery and bull market, Wall Street had been on a hiring spree that began in 2009. This included fat signing bonuses. It turns out, however, that the recovery financial firms anticipated hasn't panned out. As a result, they are trying to wiggle out of paying some of those lofty bonuses promised. Aaron Lucchetti of the Wall Street Journal reports:
"The economics of the business are going to have to change," says one executive at a firm that paid bonuses to incoming brokers. Many deals that look bad in hindsight were struck because asset-hungry brokerages were willing to pay "extremely uneconomic" sums, this person says.
Some frustrated firms have decided they want their money back. Financial Industry Regulatory Authority arbitration panels have issued about 165 awards related to "promissory notes," a term for payments to brokers, this year. Those cases amount to 17% of all Finra arbitration awards in 2010, the highest percentage in a decade.
Read the full story at the Wall Street Journal.