March 26, 2014
Far too often, I look at a FINRA intra-industry arbitration and shake my head, and then laugh. It all gets a bit tiring after a while. He said. She said. Nah, nah, nah. And although these dust-ups seem more the stuff of a schoolyard at recess than serious litigation, they often involve damage claims that routinely tip the million dollar scales.
In a Financial Industry Regulatory Authority ("FINRA") Arbitration Statement of Claim filed in January 2013, Claimant Fintegra alleged that former employee Respondent Lamb had breached the non-solicitation provision in his Fintegra employment agreement and that Respondent Hennion & Walsh had aided, abetted and conspired with Lamb. In furtherance of its claims, Claimant Fintegra asserted breaches of a non-solicitation provision, duty of loyalty, and fiduciary duty; violation of FINRA Rule 2010; unjust enrichment; tortious interference with contract; indemnification; and declaratory judgment. Claimant sought $500,000 compensatory damages, $500,000 punitive damages, interest, attorneys' fees, and costs. At the close of the hearing, Claimant sought compensatory damages of $257,470.65 on two counts. In the Matter of the FINRA Arbitration Between Fintegra, LLC, Claimant, vs. Hennion & Walsh, Inc. and Douglas C. Lamb, Respondents -AND- Douglas C. Lamb, Counter-Claimant, vs. Fintegra, LLC, Counter-Respondent (FINRA Arbitration 13-00302, March 18, 2014).
Respondents Hennion & Walsh and Lamb generally denied the allegations and asserted affirmative defenses.
Turnaround Is Fairplay
Respondent Lamb counterclaimed that following his August 29, 2012, termination by Fintegra through the actions of the firm's CEO/President Doreen Weber, that Weber destroyed, shredded or converted his papers, records and information and tortiously interfered with Lamb's business relations. Lamb further alleged that Respondent Fintegra had breached the employment agreement and failed to pay him the annual bonus due. Lamb asserted spoliation and destruction of personal property; conversion; tortious interference with business relations; defamation; breach of contract; and fraud and deceit. Lamb sought $900,000 compensatory damages, punitive damages, interest, $100,000 in attorneys' fees, costs, and $5,769.23 in further relief.
In late January 2014, Claimant Fintegra settled and dismissed its claims against Respondent Hennion & Walsh, Inc. with prejudice.
At the hearing. Claimant Fintegra orally amended its Statement of Claim to withdraw its indemnification claim and its punitive damages claim. Claimant confirmed that two claims asserted against Hennion & Walsh, Inc. only had been settled and dismissed prior to the hearing.
The FINRA Arbitration Panel denied and dismissed with prejudice Claimant Fintegra's claims and Lamb's Counter-Claim. The Panel further ordered that:
Within thirty (30) days of this Award, the Panel directs Claimant, Fintegra, LLC, to review materials removed from Mr. Lamb's office and search for Mr. Lamb's notes (including spiral bound notebooks); to return any notes not relating to Fintegra matters; and to identify and inform Mr. Lamb in writing through his counsel of any notes retained as Fintegra property. . .
Bill Singer's Comment
Wow! All that and we end with denied and dismissed. Oh, wait, the FINRA Arbitration Panel did direct a review by Claimant Fintegra to determine the whereabout of the hotly contested spiral-bound notebooks. I would love to see the letter from Fintegra's counsel to Respondent Lamb as to the issue of "any notes retained."
In the final analysis, as the great legal scholars the Manhattans so succinctly noted, perhaps the best legal counsel for these employment disputes is:
This has got to be the saddest day of my life
I called you here today for a bit of bad news
I won't be able to see you anymore
Because of my obligations, and the ties that you have
We've been meeting here everyday
And since this is our last day together
I wanna hold you just one more time
When you turn and walk away, don't look back
I wanna remember you just like this
Let's just kiss and say goodbye