Former Employer Seeks $12,000 in Damages against Employee Seeking $500,000

March 9, 2012

Somtimes there are no happy campers in an employment dispute

In a Financial Industry Regulatory Authority ("FINRA") ArbitrationStatement of Claim Filed in June 2010, Claimant Jain asserted various causes of action including, breach of contracts, tortious interference as a result of Respondent Cambridge Legacy Group's alleged:

  • breach of various Program Agreements;
  • refusal to pay Claimant buyout fees, commissions and management fees due;
  • breach of the Solicitor Agreement by terminating Claimant without any prior written notice as required by the Agreement;and
  • misappropriation of Claimant's customers and clients.

Claimant sought:

  • $276,448.92 compensatory damages;
  • $125,000.00 punitive damages; and
  • $ 75,000.00 attorneys' fees.

In the Matter of the FINRA Arbitration Between Ravi Jain, Claimant/Counter-Respondent, vs. Cambridge Legacy Group, Inc.,Respondent/Counter-Claimant (FINRA Arbitration 10-02667, March 5, 2012).

Respondent Cambridge generally denied the allegations, asserted various affirmative defenses, and filed a Counterclaim in which the firm asserted that Claimant's negligence had resulted in his making changes to the limit on the Nationwide Health Properties, Inc. stock without the knowledge and consent of the Respondent and without a valid securities license registration. Respondent sought $12,415 in compensatory damages plus fees and costs.

At the hearing. Respondent withdrew its Counterclaim and requested that any claims against Cambridge Legacy Securities or Cambridge Legacy Advisors not be considered because only Cambridge Legacy Group, Inc. was named as a Respondent in the Claim. The Panel denied the request


The FINRA Arbitration Panel found Respondent Cambridge Legacy Group, Inc. liable and ordered it to pay to Claimant Jain:

  • $41,600.00 in compensatory damages plus 6% interest from December 1, 2005 through February 29, 2012; and
  • $42,000.00 in attorneys' fees pursuant to Section 38 of the Texas Business and Commerce Code

Bill Singers Comment

Ah yes, another unhappy camper and an equally unhappy former employer.  So, what else is new these days on Wall Street?  Shake a stick, any stick, at any firm, Merrill Lynch, Morgan StanleyUBS, JP Morgan, Wells Fargo, and you're going to find any number of brewing and already exploded employer-employee disputes.

In Jain we have a former employee seeking just shy of a half a million dollars in damages, costs and expenses; and, on the other side of the table, his former employer slaps back with its own claim for a relatively paltry $12,415.  In industry lingo, that's sort of like 12 Bid versus 500,000 Asked - one hell of a spread.

Ultimately, after some two years of fencing back and forth, the parties failed to settle the dispute and left it in the hands of a FINRA Arbitration Panel.  How did Claimant's half a million demand fare?  He got just shy of $84,000.  Was that a victory? Who knows.

Maybe the $500,000 in demands was for show and Claimant was thrilled to get about $42,000 in damages plus about that amount again in attorneys' fee.  Maybe Claimant's last, best offer of settlement was $200,000 and Respondents were convinced that they could pound that number down at a hearing.  Alas, that's all speculation because such nuance isn't revealed to us.

One thing's for sure, arbitration decisions can break a lot of hearts - sometimes both parties come away mumbling and unhappy.