February 6, 2014
In a Financial Industry Regulatory Authority ("FINRA") Arbitration Statement of Claim filed January 2009, associated person Claimant Meyer Claimant asserted wrongful termination, defamation, and tortious interference with business expectancy. In the Matter of the FINRA Arbitration Between Norman Meyer, Claimant / Counter-Respondent, vs. Questar Capital Corporation and Questar Asset Management, Inc. Respondent / Counter-Claimants (FINRA Arbitration 09-00239, January 29, 2014).
According to the FINRA Arbitration Decision, Claimant Meyer asserted that he had built an Office of Supervisory Jurisdiction ("OSJ"), which generated an override from covered registered representatives. Claimant alleged that Respondent Questar wrongfully terminated him as part of its plan to
Further, Claimant alleges that untruthful allegations by Respondent Questar on his Uniform Termination Notice for Securities Industry Registration ("Form U5") sabotaged and undermined his ability to obtain employment, and interfered with his ability to engage in business. In addition to an expungement of his Central Registration Depository records ("CRD"), Claimant sought $1 million in compensatory damages, $2 million in punitive damages, and interest, attorneys' fees, and costs.
- seize the OSJ's revenue stream and,
- retaliate against him because of his purported testimony before the Kentucky Office of Financial Institutions ("OFI").
From Defensive To Offensive
Respondents generally denied the allegations, asserted affirmative defenses, and filed a Counterclaim against Meyer. Asserting breach of contract and indemnification. Respondents alleged that Claimant Meyer had violated their Registered Representative Agreement and Investment Advisor Representative Agreement; and, as a consequence, he was terminated for cause. Respondents sought $10 million in compensatory damages plus costs.
On or about September 3, 2013, the parties notified FINRA that they settled the claims but left the case open for consideration of the Motion for Expungement.
In accordance with the settlement, the FINRA Arbitration Panel dismissed with prejudice both Claimant's Claim and Respondents' Counter-Claim.
Separately, the Arbitration Panel recommended the expungement of Claimant Meyer's CRD. The arbitrators recommended that Claimant's Form U5 dated January 25, 2008, have its Reason For Termination and accompanying Termination Explanation expunged and amended so that the "Termination For Cause" be deleted and replaced with a disclosure of "Voluntary" and the prior explanation deleted and left blank. The Panel recommended further conforming revisions to the Form U5, including the deletion of references to an internal review of Claimant's conduct.
The Panel's rationale for the recommended expungement was based upon its determination that the cited CRD language was essentially false and defamatory in nature. Moreover, the Panel explained that:
Based on the preponderance of the testimonial and documentary evidence adduced, the Panel finds that: a) Claimant was not involved in altering any client documents; b) Claimant did, in fact comply with Respondents' policies and procedures by notifying his supervisor of the existence of altered documents; c) Claimant did, therefore, comply with "investment related statutes, regulations, rules or industry standards of conduct"; and d) Claimant was not, therefore, terminated for cause. . .