FINRA Defamation Arbitration Slander and Llibel
Compensatory damages plus punitive damages FINRA slander and libelClaimant sought $3,862,517.00 in compensatory damages plus punitive damages, attorneys' fees, and costs. It also seems that at some point in these proceedings, Claimant sought an expungement of defamatory information. Wall Street employees are supposed to be far too intimidated to sue their former employers. There's this industry lore about not washing your dirty laundry in public and how FINRA is basically a pro-employer forum. often it is just not true very good verdicts can be obtained in defemation sutis aginst companys like: Merrill Lynch, Morgan Stanley, JP Morgan, Goldman Sachs, Citigroup, or Wells Fargo
FORM U4: Termination Disclosure slander and libel"FORM U4: Termination Disclosure
Have you ever voluntarily resigned, been discharged or permitted to resign after allegations were made that accused you of:
1.violating investment-related statutes, regulations, rules, or industry standards of conduct?
2.fraud or the wrongful taking of property?
3.failure to supervise in connection with investment-related statutes, regulations, rules or industry standards of conduct?
In July 2011, a Philadelphia FINRA Panel awarded Gregory Kipple, a former broker of Wells Fargo, $6.83 million for wrongful termination and defamation ($4.3 million for lost earnings; $1 million for defamation; $1 million in punitive damages for violation of New Jersey's Conscientious Employee Protection Act; and $530,000 in cost and attorney's fees). Wells Fargo was also ordered to update Kipple's U-5 to reflect that he was "terminated without cause."
FORM U5: Termination Disclosure slander and libelFORM U5: Termination Disclosure
Did the individual voluntarily resign from your firm, or was the individual discharged or permitted to resign from your firm, after allegations were made that accused the individual of:
1.violating investment-related statutes, regulations, rules or industry standards of conduct?
2.fraud or the wrongful taking of property?
3. failure to supervise in connection with investment-related statutes, regulations, rules or industry standards of conduct?
Broker-dealers that are members of the FINRA are required to file a Form U-5 when terminating their relationship with a registered representative. Broker-dealers must also describe the specific reason(s) that the rep was discharged or permitted to resign. Publishing the reasons or causes for a rep's discharge or resignation can be troubling if the reasons disclosed on the U-5 were false, exaggerated or misleading.
Damages against the broker-dealer for defamatory statements on one's U-5A black mark on one's U-5 can make it extremely difficult, and in some cases, impossible, to find another job in the industry. Therefore, the potential damages against the broker-dealer for defamatory statements on one's U-5 can be exponential, especially if the false statements were intentionally or recklessly published. In addition to compensatory and punitive damages, the statements on the U-5 can be ordered to be expunged and amended to reflect the truth.
Defamation, breach of contract, and tortious interferenceIn June of 2011, a FINRA Arbitration Panel awarded a Claimant with a substantial punitive damage award. In Olsen v. World Equity Group, Olsen alleged defamation, breach of contract, and tortious interference. Claimant Olson alleged that Respondent WEG had breached its employment contract with him, wrongfully terminated him, and maliciously defamed him on his Form U5. Olson was awarded $285,000 in compensatory damages, $575,000 in punitive damages, and $282,800 in attorney's fees. The Panel also ordered expungement of the defamatory comment from his U-5 which stated,
Charles Schwab was punished in 2010 with a substantial punitive damage award by a FINRA PanelCharles Schwab was punished in 2010 with a substantial punitive damage award by a FINRA Panel. In that case, Claimant Timothy Leahy, who was a registered representative with Charles Schwab, was awarded $1.8 million in total damages, of which $1.5 million was comprised of punitive damages, as well as expungement of the defamatory statement from his U-5. Leahy's U-5 stated that he was terminated for "failure to adhere to HR related policies." The Panel found that Schwab conducted an inefficient human resources investigation, stated false violations as reasons for his termination, and found that Schwab had the "specific intent" to harm the Leahy.
Arbitrations are usually resolved within a yearArbitrations are usually resolved within a year versus much longer in court. Costs in arbitration are less than court, and appeals are much more limited. Cases are heard on the merits. Dismissals of claims on motions are almost nonexistent. Arbitrators are free to apply concepts of equity and fairness, as opposed to following technicalities.Perception that the system is stacked in favor of the companys. Concern that some arbitrators are reluctant to mete out large awards against big brokerage firms or to issue strong discovery rulings. Lack of depositions
Outrageous conductGeneral factors that will persuade that the conduct was extreme and outrageous (1) there was a pattern of conduct, not just an isolated incident; (2) the plaintiff was vulnerable and the defendant knew it; (3) the defendant was in a position of power; (4) racial epithets were used; and (5) the defendant owed the plaintiff a fiduciary duty. For example, if a defendant refused to inform a plaintiff of the whereabouts of the plaintiff's child for several years, though that defendant knew where the child was the entire time, The conduct must be heinous and beyond the standards of civilized decency or utterly intolerable in a civilized society. Whether the conduct is illegal does not determine whether it meets this standard.
HarmThe emotional distress suffered by the plaintiffs must be "severe." This standard is quantified by the intensity, duration, and any physical manifestations of the distress. A lack of productivity or a mental disorder, documented by a mental health professional, is typically required here. Most insurance liability policies provide for coverage of negligently inflicted injuries but exclude coverage of intentionally inflicted injuries. If a victim is intentionally injured by a person, many theorists perceive that the victim will tend to recast the claim as being one for negligence in order to fall within the coverage of the insurance policy. In contradistinction to Nevada the law in some state is The emotional distress for which monetary damages may be recovered, however, ought not to be that form of acute emotional distress or the transient emotional reaction to the occasional gruesome or horrible incident to which every person may potentially be exposed too.
Malicious, false, slander and libelIf the defamation tends to injure the plaintiff in his or her business or profession, it is deemed defamation per se, and damages will be presumed. Whether a statement is capable of a defamatory construction and damaged the victim is a question of law. it is usually a requirement that this claim be false and that the publication is communicated to someone other than the person defamed for a case to exist. If the offending material is published in some fleeting form, as by spoken words or sounds, sign language, gestures and the like, then this is slander. Statements of opinion that cannot be proven true or false.
Categories of slander that are actionable per seThe four (4) categories of slander that are actionable per se are (i) accusing someone of a crime; (ii) alleging that someone has a foul or loathsome disease; (iii) adversely reflecting on a person's fitness to conduct their business or trade; and (iv) imputing serious sexual misconduct. you need only prove that someone had published the statement to any third party for this kind of case. No proof of special damages is required. In May, 2012 an appeals court in New York, citing changes in public policy with regard to homosexuality, ruled that describing someone as gay is not defamation.
Additional resources provided by the author
- Howard Robert Roitman’s Guides
- Investment fraud arbitrations FINRA Motions
- Disputes with your Financial broker- advisor- FINRA arbitration
- Risk management
- Negligence by employees in Nevada liability of employer
- arbitration awards with glaring errors are not appelable
- Intentional Infliction of Emotional Distress in Nevada
- Defamation Slander/liable
- Make sure the investment professional and her firm are registered