FINRA Orders Expungement of Defamatory U5

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Jul 21, 2010 12:10 pm
     #800080 ;">FINRA Arbitrator Orders Expungement of Defamatory U5#800080 ;"> http://www.brokeandbroker.com/index.php?a=blog&id=492

On its face, this appeared to be a relatively simple arbitration in which FINRA Associated Person E. Brent Lundgren asserted causes of action against FINRA Associated Persons William Brown Park and Mary L. Redell for owed commissions and expungement of his Form U5. Claimaint Lundgren also sought $7,069.56 in compensatory damages, $2,500 in punitive damages, and costs of $325. As to who Respondents Redell or Park were to Claimant Lundgren, don't ask me because I don't know and the Arbitration decision doesn't spell it out. In the Matter of the Arbitration Between E. Brent Lundgren, Claimant, vs. Will Brown Park and Mary L. Redell, Respondents (FINRA Arbitration 09-06571, July 13, 2010).

While at first blush this looked like a straightforward case, as they say, appearances can be deceiving;  and this arbitration proceded in a manner that was anything but simple.

The Roundabout Way

For starters (and I should have seen this coming), all the parties in this FINRA arbitration appeared without legal counsel (pro se). That virtually guaranteed that the sole FINRA Arbitrator James A. Lundberg would have his work cut out for him. We get a hint that this was going to be a bit like pulling teeth without an anesthetic when Arbitrator Lundberg noted that Claimant Lundgren "has asked in a roundabout way to have the Termination explanation under Reason for Termination in his form U5 expunged."

Okay . . . you know, if you're the Claimant in a FINRA Arbitration, it's probably not the best thing in the world if your claims are characterized by the trier-of-fact as roundabout -- but, as the saying goes: all's well that ends well.

By letter dated February 9, 2010. Claimant withdrew his claims against Respondent Redell. Subsequently, Arbitrator Lundberg denied an award of punitive damages but ordered Respondent Park to pay to Claimant Lundgren compensatory damages of $7,069.56 and $162.50 of Claimant's costs.

Possibly Engaging in Civil Misconduct

Further, based upon a finding that the Termination Comment on Claimant's Form U5 (Section 3) dated October 2, 2009, (as filed by United Equity Securities, LLC) was defamatory and lacking a factual basis,  the Arbitrator recommended the expungement the offending language,  which read:

VIOLATION OF COMPANY POLICIES AND PROCEDURES AND POSSIBLY ENGAGING IN CIVIL MISCONDUCT: PRELIMINARY INVESTIGATION SUGGESTS THAT REPRESENTATIVE VIOLATED HIS EMPLOYMENT AGREEMENT BY (1) DISTRIBUTING CONFIDENTIAL COMPANY INFORMATION TO THIRD PARTIES, (2) RECRUITING OR ATTEMPTING TO RECRUIT REPRESENTATIVES AWAY FROM FIRM. (3) REFUSING TO PROVIDE INFORMATION RELATED TO AN INTERNAL INVESTIGATION. AND (4) DISSEMINATING DEFAMING AND/OR SLANDEROUS INFORMATION ABOUT A PRINCIPLE OF THE FIRM"

 TO READ THE FULL DECISION AND BILL SINGER'S COMMENT, VISIT:

http://www.brokeandbroker.com/index.php?a=blog&id=492