Several weeks after the two top executives of Boston Bancorp resigned, the embattled company is suing the former president's brother, accusing him of grossly overcharging the thrift company by at least $80,000 in brokerage fees.
The $2 billion-asset company claims Lloyd W. Archibald and his firm, Schneider Securities Inc., violated a 1993 agreement to charge no more than 8.5 cents per share for stock transactions on behalf of the thrift.
The lawsuit accuses the broker of actually charging up to seven times the negotiated fee and then concealing the excess charges in each transaction and "grossly" understating the total fees paid each year.
The lawsuit, filed last week in Suffolk County Superior Court, accuses the brother of former president Paul A. Archibald of breach of contract, fraud, misrepresentation, unfair and deceptive trade practices, and breach of fiduciary duty.
The suit demands a full accounting of all brokerage fees from 1983 to 1994, when Lloyd Archibald served as broker for the thrift company. Boston Bancorp is seeking an undetermined sum - estimated to be at least $80,000 - as well as triple damages.
The broker called the charges "false." He declined to comment further.
His brother resigned in early February, along with Richard R. Laine, who was chairman and chief executive. They did so after federal regulators blasted management for abuses including nepotism and excessive brokerage fees and executive salaries.
The charges stem from transactions made by during the thrift company's two stock repurchase programs in 1993 and 1994, when the broker bought a total of 700,200 shares on behalf of the company.
Under a 1993 contract, Lloyd Archibald and his firm had agreed not to charge more than 8.5 cents per share for each stock transaction, the suit said. But the firm charged as much as 62.5 cents per share in some of the transactions.
The confirmation notices sent to the thrift company didn't reveal the brokerage fees; only totals of transaction charges were shown.
And when officials asked Lloyd Archibald to reveal how much was charged for the year to comply with federal reporting requirements, he "grossly understated" the total fees for 1993 and 1994, revealing the higher charges only under pressure, according to the court document.