ICON Wins About $700,000 But Loses Injunction Against Former Employee In FINRA Arbitration

March 30, 2012

In a Financial Industry Regulatory Authority ("FINRA") Arbitration Statement of Claimfiled in May 2009, Claimants asserted causes of action for: 
  • alleged breach of contract by Respondent Holmes;
  • tortious interference with a contract by Respondents Adviser Dealer, Meeder Asset and Meeder Financial; and
  • interference with prospective business relationships against Respondents Adviser Dealer, Meeder Asset, Meeder Financial and Holmes.

The causes of action related to Respondent Holmes' prior employment with Claimants. The Claimants sought an order requiring Respondents to return any and all copies of Claimants' confidential, proprietary, and/or trade secret information within their possession, custody or control.  Additionally, Claimants sought damages in an amount to be proven at hearing, interest, fees, and costs.

Request For Permanent Injunctions

Additionally, Claimants requested entry of a Permanent Injunction that would:

permanently enjoin Respondent Holmes from:

  • Working, as a regular employee, independent contractor, consultant, or intern, for any of the Claimants' direct competitors;
  • Contacting, directly or indirectly, alone or in concert with others, any of Claimant/Counter-Respondents' clients or those clients' respective registered representatives or advisors, including Lincoln, Securities America, America International Group, and National Financial Partners, as well as any and all Pinnacle Club members; and
  • Directly or indirectly, using or disclosing to any person or entity any confidential information.

permanently enjoin Respondents Adviser Dealer, Meeder Asset, and Meeder Financial from:

  • continuing to employ or employing Respondent Holmes, whether as a regular employee, independent contractor, consultant, or intern, until the expiration of two years after the last day of Holmes' employment with Claimants.

Get Yer Scorecard Here

The caption to this case sort of underscores how bitter and extended the underlying dispute apparently became:

In the Matter of the FINRA Arbitration Between:


ICON Advisers, Inc.

ICON Distributors, Inc.

ICON Management & Research Corporation


Respondents/Counter-Claimants/Third-Party Claimants

Adviser Dealer Services, Inc.

Stephen C. Holmes

Meeder Asset Management, Inc.

Meeder Financial, Inc.


Third-Party Respondent

Craig Thomas Callahan

(FINRA Arbitration 10-02253, March 27, 2012).

Respondents generally denied the allegations, asserted various affirmative defenses, and asserted a Counterclaim against Claimants for:

  • breach of the non-disparagement clause of their agreement;
  • defamation; and
  • tortious interference with the contract.

Additionally, in Respondents' Third-Party Claim against Third-Party Respondent Callahan, they asserted defamation and breach of the non-disparagement clause of their agreement.


The FINRA Arbitration Panel found Respondents Adviser Dealer, Meeder Asset and Meeder Financial jointly and severally liable and ordered them to pay to Claimants:

  • $250,000 in nominal damages;
  • $200,000 in nominal damages for tortious interference with business relationships;
  • $50,000 for tortious interference with prospective business;
  • $164,170.00 in attorneys fees pursuant to the terms of the Retirement Agreement;
  • $11,120.81 in costs; and
  • $26,000 in expert witness fees.

The FINRA Arbitration Panel declined to enjoin any activity by Respondents.

Separately, the FINRA Arbitration Panel found Claimants jointly and severally liable to and ordered them to pay Respondent Holmes:

  • $6,143.00 in attorneys' fees;
  • $150,000 for his ownership share in AthenaInvest (which he must sign over to Claimants).

The Arbitrators denied the Third-Party Claim.

The Arbitrators ruled that Claimants and Holmes are fully released from any further obligations under the 2009 Retirement Agreement and the2010 Separation Agreement; and that both parties are held harmless from any and all liability arising from the actions and events that occurred before and including the signing of the agreements.

Bill Singer's Comment

Regular readers of my "Street Sweeper" column know that this type of FINRA Arbitration Decision earns little more than a razz from me.  As best we can infer from the vague presentation of crucial facts, Respondent Holmes appears to have "retired" from Claimants' employ in or around 2009/2010.  Based upon online FINRA regulatory documents as of March 30, 2012, Respondent Holmes was registered with Claimant ICON Distributors Inc. from 1998 until about February 2010; thereafter, about April 2010 he became employed with Respondents Meeder. I'm drawing the distinction between "registered" and "employed" but I'm not certain that I'm correct - just a hunch.

As best we can tell, this case arose from a dispute attendant to Respondent Holmes' apparent "retirement" from Claimants - but for the fact that he seems to have un-retired a few months after leaving (albeit he may not have resumed his registered activities - or he may have, or maybe not, or . . . well, like I said, it's just not clear).  Whether there was bad faith in the representations that Holmes made to his former employers is abundantly unclear to me from a reading of this Decision but for the fact that someone must have done something wrong in order to elicit the awarding of nearly $700,000 in damages, costs, and fees. Again, I'm guessing that Claimants thought that the former employee had "retired," which is quite different from merely resigning.

How about I just leave it at that? I dunno what the hell this case is really about or who did what to whom.  Lately, I've been writing about these employment disputes and the demand for an injunction - by Edward Jones, Merrill Lynch, and others - is becoming a common aspect.  Some FINRA Arbitration Panels explain the nature of the dispute and offer a detailed rationale.  Good for them!  Other Panels just drive me crazy, as was the case here.

The only saving grace here is that the Decision offers a glimpse into the panoramic relief sought by a jilted employer.  It's also interesting because this Panel fashioned a ruling that declined to enjoin any conduct but, nonetheless, walloped the Respondents with a hefty financial penalty.  Still - this Decision has all the usefulness of an unalphabetized dictionary.