Former Hartford Securities Rep Demands Over $10 Million In Damages

March 5, 2015

In the fiery afterglow of a nasty post-employment split, former employees and former employers are apt to do battle over underpaid or unpaid bonuses, deferred compensation, and trailing commissions/fees.  In a recent example of such hostilities, a former registered person sought over $10 Million in damages and an expungement. The former employer, not happy to simply sit by and turn the other cheek, got in a few of its own shots.  In the end, it seems more of a fizzle than fizz but you be the judge.

Case In Point

In a Financial Industry Regulatory Authority ("FINRA") Arbitration Statement of Claim filed in September 2012, former employee Claimant Miller asserted libel per se; and quantum meruit and unjust enrichment relating to his retention bonuses, deferred compensation, and revenues received by his former employer Respondent Hartford Securities. In addition to seeking an expungement of allegedly false and defamatory language on his Uniform Termination Notice for Securities Industry Registration ("Form U5"); Claimant also sought
interest, attorney's fees, and
  • at least $10 Million in libel per se damages and punitive damages;
  • quantum meruit / unjust enrichment damages plus interest in connection with the alleged confiscation of his Retention Bonus and Deferred Compensation;
  • compensation for the revenues received and to be received by Respondent as a result of Claimant's alleged efforts and labor; and
  • damages emanating from an alleged FINRA investigation prompted by Respondent's alleged defamatory U-5 filing.
In the Matter of the FINRA Arbitration Between Christopher Stephen Miller, Claimant / Counter-Respondent, vs. Hartford Securities Distribution Company, Inc., Respondent / Counter-Claimant (FINRA Arbitration 12-03198, February 26, 2015).

Counter Punching

Respondent Hartford generally denied the allegations, asserted various affirmative defenses, and Counterclaimed based upon alleged breach of contract; conversion; misappropriation of trade secrets; computer fraud; and violation of California unfair compensation law. Counter-Claimant Hartford sought compensatory and punitive damages, restitution, attorneys' fees, interest and costs/fees. Additionally, Counter-Claimant sought orders :
  • requiring Claimant to abide by the terms of the Confidentiality Agreement and Retention Agreement, of which he is a signatory;
  • permanently enjoining Claimant from using or divulging Hartford's confidential and proprietary information and trade secrets; and
  • requiring Claimant to immediately return to Hartford all of its property.
Award

The FINRA Arbitration Panel found Respondent Hartford liable to and ordered it to pay to Claimant $13,384.00 in compensatory damages plus interest at the rate of 9% per annum accruing from May 1, 2012 until paid in full.

The Panel denied Claimant's request for expungment but recommended a modification to his "Internal Review Disclosure Reporting Page" indicating that the previously referenced "internal review" was "not completed."

Bill Singer's Comment

Not disclosed in the FINRA Arbitration Decision but disclosed in FINRA's online BrokerCheck as of March 5, 2015, is that on April 18, 2012, Hartford reported that Miller had voluntarily resigned based upon allegations pertaining to retirement plans and the:

USE OF UNAPPROVED MARKETING MATERIALS

VOLUNTARY RESIGNATION DURING A REVIEW OF THE ALLEGED USE OF UNAUTHORIZED MARKETING MATERIALS

Miller's BrokerCheck statement in response to those allegations was

I NEVER USED MARKETING MATERIALS WITHOUT AUTHORIZATION. I AM IN THE PROCESS NOW OF COMMENCING A FINRA ARBITRATION AGAINST HARTFORD TO EXPUNGE THE FALSE, DEFAMATORY LANGUAGE THAT HARTFORD NOTED ON MY U5