Financial Industry Regulatory Authority arbitrators awarded damages to a former broker for Fidelity Brokerage Services in a dispute over his termination, reports ThinkAdvisor.
The arbitration panel issued its ruling in the claim of Ryan Sanghak Lee, whose causes of action against Fidelity included wrongful termination, defamation, and tortuous interference with prospective economic damage.
Two members of the three-member panel awarded $500,000 in compensatory damages to Lee in regards to the complaint he filed in 2020. He had been seeking damages in excess of $1 million plus interest, costs, expenses including expert witness fees, and unspecified punitive damages.
Lee also requested expungement of termination disclosures filed by Fidelity on his Form U5 as well as a client complaint. In the complaint, a client alleged that Lee’s recommendation to surrender an annuity to fund a managed account was unsuitable and resulted in unanticipated tax consequences.
Lee said it was the customer’s decision to transfer the funds to the managed account and that she was aware of the tax consequences involved. The majority of the arbitrators recommended that all references to the client’s complaint be expunged from from Lee’s registration records, saying the client’s allegation was “factually impossible or clearly erroneous.”
The disclosure regarding Lee’s 2018 termination by Fidelity said that it involved an “allegation regarding whether employee took credit for detailed customer interactions for purposes of potential incoming compensation credit without actually having had either any interaction or the requisite degree of interaction with the customers.”
Two of the three FINRA arbitrators said all references to Lee’s termination from Fidelity on his Form U5 must be expunged and that the reason for his termination should be changed to “Other”.
The majority panel said the explanation for his termination should be replaced with the language, “After a dispute between Employer and Employee relating to an accusation that Employee violated rules relating to customer interactions, Employee left the company.”
The third arbitrator said Lee’s claim should have been dismissed in its entirety with the exception of hearing costs.
Lewitas Hyman routinely represents financial advisors and other registered representatives who were wrongfully terminated by their firm. Our attorneys take a thoughtful approach to clients’ cases by first trying to work with the terminating firm concerning the Form U5 disclosure. When necessary, our attorneys are prepared to file wrongful termination and defamation claims. We are prepared to assist when the circumstances surrounding your termination are wrongful. Contact Lewitas Hyman at (888) 655-6002 or through our online contact form for a free consultation.