Former Ameriprise Employee Says Firm Lied to Him -- and FINRA Panel Forgives Promissory Note Debt

September 1, 2010

In a Statement of Claim filed in October 2009, Claimant Ameriprise sought to recover $114,887.83 in damages as a result of Respondent Waro's failure to repay the outstanding balance due on a Promissory Note ("PN") from July 2007.  Respondent generally denied the allegations. In the Matter of the Arbitration Between Ameriprise Advisor Services, Inc., Claimant, versus David W. Waro, Respondent (FINRA Arbitration 09-05778, August 20, 2010)

Respondent Waro filed a Counterclaim seeking $336,415.01 in damages as a result of having been induced to leave his former employer based upon Claimant's misrepresentations.  Respondent alleged that he lost signficant revenue and income following employment by Ameriprise because he did not receive promised infrasturcture support and was required to maintain frequent office hours in Rockford, Illinois rather than being able to service his clients in Wisconsin.  Claimant generally denied those allegations.

The FINRA Arbitration Panel denied Claimant's Claim and Respondent's Counterclaim and dismissed the matter with prejudice.

Bill Singer's Comment:  Notwithstanding the short set of facts and the strike-'em-out-throw-'em-out double-play nature of the Arbitration Panel's dismissal of both the Claim and the Counterclaim, this is an interesting case. 

Ameriprise decided to go after its former employee for the outstanding PN balance, and one must assume that litigation decision was based upon a conclusin by the Claimant that it had a strong case against its former employee.  Given the result, someone at Ameriprise miscalculated. Something was not fully considered.

In these daunting financial times, former employees are simply not ripping checks out of their checkbooks, filling in their former employer's name, and entering the full amount of PN balances.  Not only are former employees contesting these arbitrations but, as in the case of Respondent Waro, they are filing their own claims for damages. Moreover, the supporting allegations behind such battling respondents' counterclaims are part of a swelling industry chorus of similar complaints: You promised me support and considerations but you never delivered on them!

In the end, this FINRA arbitration was not a good outcome for Ameriprise and puts industry employers on notice that their former brokers are not simply showing up at FINRA hearings and defending against PN repayment cases with the explanation -- historically viewed as a somewhat puny "excuse"  -- that they're broke and times are tough.  No, now its far more nuanced.  Former employees are complaining that they were lied to, defrauded, mislead, and generally left to wither on the vine -- and that all of those (or some of those factors) should excuse full or partial repayment of their PNs.  Recent FINRA decisions show that the defenses are starting to resonate. 



[I] sort of smiled when I read the musty musings of the Chamber's writer, who exalts the power of the individual to solve his or her own problems. Of course, individual solutions aren't necessarily doing that well these days with the Great Recession and all, but, hey, you can't blame some fuddy duddy from the '50s for not getting all the fine points correct. (And before you all send me all those nastygrams, I was born in the early, very early, '50s). Still, it's hard not to smile, if not laugh, at the awkward suggestion all those years ago by the Chamber that the issue of equal pay is somehow related to "choosing the right place to work and choosing the right partner at home."

Ultimately, equal pay would seem to be a matter of fairplay, which I always thought was the bedrock of America's capitalism. An honest day's work for an honest day's pay. What the Chamber of Commerce didn't quite seem to understand is that sometimes the "choice" to work at home or work part-time or on a flex schedule is not a voluntary option but one that is forced upon women. If we value families, then why is the economic burden of raising them always pressed upon women at the cost of fair pay and career opportunities? Whatever happened to the concept of shared sacrifice?

Read Bill Singer's Entire Huffington Post Article at: