For Some Reason, FINRA Arbitrators Award $2 Million To Broker For Something

April 12, 2012

Why? Dunno. How come? Dunno. Another classic FINRA Arbitration Decision.

In a Financial Industry Regulatory Authority ("FINRA") Arbitration Statement of Claim filed in December 2008, Claimant Concepcion asserted that he had worked for Respondent Lincoln Financial Advisors for over twenty years before being abruptly terminated on August 20, 2008.

Although I think that I have a sense of what happened here, the FINRA Decision is not what I would call the picture of clarity; however, rather than take pot shots for the manner of the presentation of the facts, let me simply cite to the language:

Claimant asserted that he had arranged an opportunity with a potential managing partner leading a number of Wachovia offices in Ohio regarding variable life insurance sales. Claimant asserted that as the arrangement was being completed, Lincoln Financial raised belated objections to the deal and subsequently terminated him because he had requested a short time table for the confirmation of the terms of the proposed transaction. Claimant stated that Lincoln Financial would not offer him severance in regard to this termination if he refused to agree to a non-competition agreement. As a result, according to Claimant, Lincoln Financial made and published false and misleading information regarding the circumstances surrounding the termination stating to his customers that he had made a "career change," implying that he had left the industry altogether as well as asserting that he had been terminated from their employ "with cause".

Oooookay.  Umm, lemme see. As best I understand, Claimant was arranging an opportunity. Not exactly sure what that means. And this arranging was to involve a "future managing partner." And this arranging had something to do with variable life insurance and some Wachovia offices in Ohio.  Y'all got that?  Really?? Well, you're a hell of a lot smarter than me.

Anyway, when Claimant asked for a quick turnaround of approval for whatever the above deal was, he claims that Respondent sandbagged him by firing him.  There is something in there about a demand in the form of an either/or involving a non-compete and the payment of severance, but there's no clarification as to whether Claimant agreed, didn't agree, or whether he was ultimately paid any severance. The implication seems to be that there was no agreement or payment, but you may infer what you like.

Finally, it seems that Claimant was angered by Respondent's telling his customers that he had made a "career change," and also telling some folks that he had retired, and, for good measure, telling some other folks that he had been terminated for cause. No, it doesn't read all that clearly in theDecision, but I'm pretty sure that's what they were going for.

As a result of the above, Claimant Concepcion asserted causes of action for

  • unfair competition;
  • tortious interference with business relationship and prospective business relationship;
  • defamation; and
  • breach of contract.

Claimant sought at least $1 million in compensatory damages (set at $4,768,585.00 at the hearing), punitive damages, interest, attorneys' fee, costs, and expenses. In the Matter of the FINRA Arbitration Between Jeffrey Concepcion, Claimant, vs. Lincoln Financial Advisors and Lincoln National Corporation, Respondents (FINRA  08-04833, April 10, 2012).

Respondent Lincoln Financial Advisors generally denied the allegations and asserted various affirmative defenses.

In January 2009, FINRA received a joint stipulation that stated that Lincoln National Corporation had been wrongly named as a Respondent and would be replaced by Lincoln Financial Advisors. Shortly thereafter, Claimant withdrew without prejudice his claims against Respondent Lincoln Financial Corporation.

At the arbitration hearing, Claimant withdrew his claim for breach of contract.


The FINRA Arbitration Panel found Respondent Lincoln Financial Advisors liable and ordered it to pay to Claimant Concepcion $2,037,232.00 in compensatory damages plus $375 in filing fee costs.

Bill Singer's Comment

You know, it's one thing when you make me add my own punctuation and inferences to an official FINRA Decision in order to achieve some understanding of the complaint.  But, seriously, couldn't this Panel have provided us with a smidgen of explanation as to why they awarded a whopping $2 million to this Claimant?  I'm guessing that Claimant Concepcion made out a very compelling case.  I'm guessing that he proved that somehow his reputation was damaged.  I'm guessing that Respondent Lincoln Financial Advisors came off poorly in the Panel's eyes.

I just wish that the good folks at FINRA appreciated that these arbitration Decisions aren't supposed to be guessing games. Certainly not when you've titillated us with such a fascinating claim and rendered such a breathtaking award.  And, by the way, how the hell do you award a single individual registered person over $2 million but not a penny in punitive damages?