Disclosing a bankruptcy to an employer is nerve-wracking. For financial advisors it can taint their professional reputation and their character, make it more difficult to be bonded, and, in some cases, lead to employment termination.
The case for advisor Diana Behre, she claims, involves the loss of her job and her book of business.
Diana Behre
Behre, an advisor with Hampton Square Wealth Management in Augusta, N.J., has filed a lawsuit against her former employer, Lincoln Financial Advisors, claiming unjust termination after she filed for bankruptcy. The Fort Wayne, Ind.-based firm, managing $26.8 billion in assets under management, fired her in 2017 shortly after she disclosed that she had to file for Chapter 7 bankruptcy. Behre had been with the firm for 13 years. Behre says that in addition to being an independent contractor with the independent broker/dealer, she was also a W-2 employee working out of a Lincoln Financial office.
Derek Smith Law Group filed the complaint on Behre's behalf Sunday. A spokesperson for Lincoln said it does not comment on pending litigation.
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In 2007, Behre's mother was diagnosed with stage 4 cancer and moved in with her. Behre had been with the firm for four years at the time and had a book of business that included clients from previous firms. As she tended to her mother's needs, Behre shifted her schedule to part-time work. The medical bills impacted her personal finances, which worsened during the economic fallout stemming from the 2008 market crash, according to her court filing.
Behre was advised to file Chapter 13 bankruptcy to reorganize her debt, with a plan to repay a portion or the whole in three to five years. She filed in 2011, but wound up switching to Chapter 7, whereby Behre would be able to discharge most of her obligations, after the death of her mother in 2013. The estate she inherited was an "insurmountable financial situation," according to the complaint.
Behre notified Lincoln Financial of the status in May 2017. The disclosure prompted the independent firm's business conduct committee to review Behre. Then in September, the committee concluded in a termination letter that Behre was unfit to work for the independent broker/dealer and registered investment advisor hybrid.
Behre also claims that Lincoln retained her book of business and denied her the ability of reaching a mutual separation agreement with the firm.
Behre believes she was targeted and her work scrutinized solely because she filed for bankruptcy. Lincoln Financial Advisors allegedly violated a bankruptcy code that protects debtors from discrimination. It also breached the employment contract it had with Behre because it let her go without justification, according to Behre's allegations.
She seeks monetary awards for lost compensation and employment benefits, emotional distress, punitive damages, and attorneys fees.