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Supreme Court sides with former Ameriprise broker who challenged FINRA arbitration ruling

On Behalf of | Apr 7, 2022 | FINRA Compliance

The U.S. Supreme Court sided with a former independent broker for Ameriprise Financial who had challenged the outcome of a Financial Industry Regulatory Authority arbitration award, AdvisorHub reported.

The case involved Denise Badgerow, a Louisiana broker who had appealed to the nation’s highest court in a dispute that dates back to 2016. Badgerow initially filed wrongful termination complaints in court and with FINRA after she was discharged by REJ Properties, which was run by three independent advisors for Ameriprise. Badgerow claimed she was fired in retaliation for reporting alleged misconduct at the firm and raising concerns about workplace harassment.

Two years later, a panel of FINRA arbitrators ruled in favor of the three Ameriprise advisors and dismissed Badgerow’s claims. When Badgerow filed a lawsuit in state court, the case was moved to a federal court which confirmed the FINRA arbitration award. That decision was then upheld in the Fifth Circuit Court of Appeals in New Orleans.

But the Supreme Court ruled in favor of Badgerow last week in an eight-to-one ruling, finding that she could ask a Louisiana state court to overturn the arbitration decision despite the fact that it had already been confirmed by a federal court. In its opinion, the high court said it must respect the choice of Congress, saying that “Congress chose to respect the capacity of state courts to properly enforce arbitral awards.”

The case is seen as having potentially wide-ranging implications for financial professionals who challenge arbitration awards, giving them more options to go to state courts as opposed to federal courts.

Handling financial services disputes requires counsel with a significant understanding of the industry, the laws, rules and regulations that impact our clients and the forums in which disputes are adjudicated. At Lewitas Hyman, our attorneys’ unparalleled litigation experience comes from leveraging their industry-specific knowledge developed from working at firms such as Morgan Stanley, UBS Financial Services and EVEREN Securities, serving as outside counsel for some of the world’s largest law firms, and through prior affiliations with the SEC. For more information about our arbitration and litigation services, please contact Lewitas Hyman at (888) 655 6002 or through our online contact form