Jesup & Lamont Loses FINRA Arbitration Over Defamation
What Goes Round, Comes Round?, http://www.brokeandbroker.com/index.php?a=blog&id=560
In a FINRA Arbitration Statement of Claim filed in January 2010, Claimant Jesup & Lamont Securities Corp. sought $35,000 in compensatory damages and $10,500 in various fees from Respondent Foley arising from the alleged non-payment of a promissory note. Respondent generally denied the allegations, asserted various affirmative defenses, and filed a Counterclaim seeking $1,000,000.00 in compensatory damages and an expungement of alleged defamatory statements on his From U4.
Claimant Jesup & Lamont apparently claimed that Jane Fisher, a customer of Respondent Foley, had complained about the broker engaging in an unauthorized transaction and the unauthorized dissemination of confidential account information, all of which purportedly resulted in the customer sustaining a loss of $5,000.00. That information was noted on Respondent's Form U5 and would have required disclosure on his Form U4 and other regulatory filings.
Respondent Foley testified that customer Jane Fisher's account was supervised by another broker, who suddenly departed from the Claimant's firm and that the account was then transfened to Respondent. In order to protect the assets of Fisher (and with her consent), Respondent sold certain posttions in her account and deposited the proceeds in eIther a money market account or other conservative investments.
Subsequently, Fisher wrote a letter requesting that the Claimant determine if her account was being property maintained according to her financial goals. As to whether that letter was a mere inquiry or a complaint appears to have been the source of contention between Claimant and Respondent. Moreover, the substance of the customer's communication also appears to have been disputed.
READ BILL SINGER'S COMPREHENSIVE ANALYSIS OF THIS CASE AT: