National IFA Towry has been hit with £2.3 million of legal costs due to its high-profile court battle with Raymond James.
Towry lost the case, in which it was seeking damages of £6 million, alleging seven former Edward Jones advisers who joined Raymond James had solicited clients, and was ordered to pay legal costs of £1.2 million.
Those costs have contributed towards a total bill of £2.3 million related to the cost, which Towry has disclosed in its accounts for 2011. 'Litigation costs in 2011 relate to a court case involving the actions of former advisers and reflect the total estimated costs payable by the group,’ it said in the accounts.
Chairman Glyn Jones added of the case: 'We were unsuccessful in our claim and it is now clear that whilst our present standard of both non-solicitation and non-dealing clauses are accepted by the court as being legitimate, the required level of proof to succeed in a claim for a breach of a standalone non-solicitation clause is very high.'
Towry also incurred exceptional regulatory costs of £1.3 million in 2011, including a fine imposed by the Financial Services Authority (FSA) in September of £494,000 for providing misleading information to the regulator and client money breaches.
The accounts said: 'Exceptional regulatory costs in 2011 relate to improvements to our client money and asset procedures and controls following a review of this area by the FSA.'
Towry hit profitability in 2011 reporting a pre-tax operating profit of £10.2 million, following a £5.5 million loss in 2010, as it incurred costs related to the integration of Edward Jones, which it bought in October 2009. The firm’s revenue also increased to £84 million, from £79 million in 2010.