A Lot of Greif Between Investment Bank Employer And Former Employees

December 7, 2011

In a Financial Industry Regulatory Authority ("FINRA") Arbitration Statement of Claim filed in July 2010, Claimant Greif & Co. asserted breach of fiduciary duty against Respondents Allen and Iannini; and civil extortion against Respondent Iannini. The claims arose in connection with Claimant's employment relationship with Respondents, and Respondents' creation of an investment banking business (William & Henry Associates).

Claimant Greif & Co. sought disgorgement of Respondents' wages and additional compensatory/punitive damages.  Claimant also sought a declaration that Respondents must immediately return Claimant's property. Similarly, Claimant sought an injunction prohibiting Respondents from utilizing or disclosing Claimant's property, or any other confidential, proprietary, or trade secret information of Claimant's in any way; and from further disparagement of Claimant. Additionally, Claimant sought to enjoin Respondents from destroying documents relating to their competing business. In the Matter of the FINRA Arbitration Between Greif & Co., Claimant/Counter-Respondent vs. Sara C. Allen And David Joel Iannini, Respondent/Counter-Claimants/Third Party Claimants vs. Lloyd Greif, Third Party Respondent (FINRA Arbitration 10-03128, December 1, 2011).

Respondents generally denied the allegations, asserted affirmative defenses; filed a Counter-Claim; and filed a Third-Party Claim against Third-Party Respondent Lloyd Greif. In the Counterclaim and Third-Party Claim, among other causes of action, Respondents asserted tortious interference and defamation. Respondents sought an expungement of their Forms U5 to reflect that their terminations as a "Voluntary Resignation."

SIDE BAR: Among the more interesting FINRA arbitration requests that I've seen in a while, were Respondents' demands for

  1. Reimbursement of costs incurred by Respondents in applying for a FINRA
    broker-dealer license; 
  2. Reimbursement of all costs incurred by Respondents in having to "rent" a broker dealer license because of the actions of Claimant and Third Party Respondent.

One Down

On August 30, 2011, Claimant, Third Party Respondent, and Respondent Allen notified FINRA that they reached a confidential settlement, and, accordingly, Respondent Allen was dismissed.


The FINRA Arbitration Panel found Respondent Iannini liable and ordered him to pay to Claimant Greif & Co. $700,000.00 in compensatory damages plus 7% interest until paid.  The Panel enjoined Respondent Iannini and any entity controlled by him from threatening, defaming or contacting Lloyd Greif, Lloyd Greif s family
and/or Greif & Co. and its employees.

Separately, the Panel enjoined Third-Party Respondent Lloyd Greif and Claimant Greif & Co from threatening, defaming, or contacting Respondent Iannini, his family and/or William & Henry Associates. Respondent lannini was ordered to be allowed to inspect his personnel file at Greif & Co. and place a letter in that file so long as the statements therein are not defamatory to Lloyd Greif, Greif & Co. or any individuals.  Finally, Respondent Iannini's request for expungement is denied.

Bill Singer's Comment

You've read the headlines about layoffs, big time, at a lot of financial services firms. For employees of Citibank, Bank of America, Morgan Stanley, these are antsy days. I mean, seriously, where's a safe bet:  Goldman Sachs, UBS, JP Morgan - and are you sure about that?

In these tumultuous times of reductions in force, layoffs, and outright failures of companies, it's hard to figure whose job is safe and what company's future is stable.  All of which is prompting a lot of folks to wonder whether going out on their own and opening their own shop might be a safer career move than simply showing up at a big firm and punching in and out.  Of course, leaving a job is one thing; opening up a competitive shop is quite another - as this arbitration shows.

Talk to enough veteran lawyers like me and you'll likely get the same sage advice:  Come in to the job with class and leave with class.

Make a scene when you quit, turn red in the face with threats and you might not only burn your bridges with your former firm but you could get a hot-head reputation with potential employees and clients.  As large a place as Wall Street seems to those outside it, for we veterans, it can be a very small neighborhood.  Word gets around - and quickly.  A reputation - good or bad - is a tough thing to change.

In this Greif arbitration, who knows what happened to light the fuse. Clearly, given all the allegations and demands, the departing parties didn't exactly shake hands and wish each other well.  No, this ended badly. $700,000 in damages awarded. Who knows how many tens of thousands of lawyers' bills?

Frankly, read this case carefully before you put in motion the steps that will take you from your present job to your own firm.  And, while you're pondering the options, ask yourself what inferences you made about the former employer and former employees' here - and would you aspire to achieve the same status?