by Bill Singer
Wall Street was always about the buck, especially a broker’s or trader’s compensation. As with all hired guns, the emphasis is on paying the going rate and then some. With massive layoffs and once-flush brokerage firms finding cash a less abundant commodity, disputes over getting paid have taken on new meaning.
Review a typical period of FINRA arbitrations and you’ll see the footprint. Firms are suing to get back loans that were not fully earned; registered persons are suing to get paid what they believe they had earned. These employer/employee disputes cross over all segments of the industry. You’re as apt to see the names of Merrill Lynch, JP Morgan, Morgan Stanley, Wells Fargo, or UBS as you are a small mom-and-pop outfit.
Bill SingerContributor
In a Financial Industry Regulatory Authority (“FINRA”) Arbitration Statement of Claim filed in September 2011, Claimant LaCombe alleged that Respondent Wedbush failed to honor an employment contract that specified the quarterly payment of incentive compensation in the amount of 25% on all trading profits and sales commissions. Claimant allegedly resigned from Respondent’s employ when the firm failed to pay to him commissions for the period of July 1, 2010 through March 31,2011. Consequently, Claimant asserted breach of contract, failure to pay commissions, failure to pay compensation owed, and failure to honor an employment contract that specified quarterly incentive compensation of 25%. By the close of the FINRA Arbitration hearing, Claimant sought $93,819.72 in compensatory damages, unspecified punitive damages, 10% interest, $36,846.58 in attorneys’ fees, and $873.36 in costs.In the Matter of the FINRA Arbitration Between Randy LaCombe, Claimant, vs. Wedbush Securities Inc., Respondent (FINRA Arbitration 11-03514, July 6, 2012)
Respondent Wedbush generally denied the allegations and asserted various affirmative defenses.
The sole FINRA Arbitrator hearing the case found Respondent Wedbush liable to and ordered it to pay to Claimant LaCombe:
- $93,819.72 in compensatory damages relating to the unpaid commissions with pre-Award interest at the rate of 10% per annum from April 8, 2011, through the date of the Award
- $288.85 in costs;
- $36,846.58 in attorneys’ fees; and
- $14,209.80 in damages pursuant to Minn. Stat § 181.14 (Subd. 2) representing the 15 day penalty specified within § 181.14
Claimant LaCombe, was ordered to return the $54,928.25 check tendered by Respondent Wedbush as an offset of the compensatory damages awarded
SIDE BAR: Minnesota Statutes 181.14 PAYMENT TO EMPLOYEES WHO QUIT OR RESIGN; SETTLEMENT OF DISPUTES.
Subdivision 1. Prompt payment required. (a) When any such employee quits or resigns employment, the wages or commissions earned and unpaid at the time the employee quits or resigns shall be paid in full not later than the first regularly scheduled payday following the employee’s final day of employment, unless an employee is subject to a collective bargaining agreement with a different provision. If the first regularly scheduled payday is less than five calendar days following the employee’s final day of employment, full payment may be delayed until the second regularly scheduled payday but shall not exceed a total of 20 calendar days following the employee’s final day of employment.
(b) Notwithstanding the provisions of paragraph (a), in the case of migrant workers, as defined in section 181.85, the wages or commissions earned and unpaid at the time the employee quits or resigns shall become due and payable within five days thereafter.
Subd. 2. Nonprompt payment. Wages or commissions not paid within the required time period shall become immediately payable upon the demand of the employee. If the employee’s earned wages or commissions are not paid within 24 hours after the demand, the employer shall be liable to the employee for an additional sum equal to the amount of the employee’s average daily earnings provided in the contract of employment, for every day, not exceeding 15 days in all, until such payment or other settlement satisfactory to the employee is made. . .