Former Employee Wins Wrongful Termination FINRA Expungement Case

October 11, 2012

Giant Gavel

In a Financial Industry Regulatory Authority ("FINRA") Arbitration Statement of Claim filed in April 2012, Claimant asserted

  • wrongful termination,
  • refusal to pay bonus and severance payments,
  • breach of covenant of good faith and fair dealing, and
  • libel on her Uniform Termination Notice For Securities Industry Registration (the "Form U5").

Claimant sought $150,000 in compensatory damages, punitive damages, and payment of all benefits that would have been due to her but for her termination without cause (which she attributed as part of "the firmwide layoffs which had been announced." Further, Claimant sought costs and fees, plus an expungement of her Form U5.  Eventually, Claimant withdrew all claims for damages with the exception of the expungement. In the Matter of the FINRA Arbitration Between Claimant, vs. SG Americas Securities, LLC, Respondent  (FINRA Arbitration 12-01596, October 5, 2012).

Respondent did not submit an Answer.


By notice dated August 17. 2012. Claimant filed an Unopposed Request for Expungement, and on that same date, both parties notified FINRA of their waiver of their right to a hearing.  The sole FINRA Arbitrator recommended that the Reason For Termination on Claimant's Form U5 be amended to state "Other;"  and that the accompanyingTermination Explanation be replaced with "Reduction in force." The Arbitrator made conforming recommendations for the Amended Form U5 to include deletion of the Termination Disclosure Reporting Page in its entirety.

Bill Singers Comment

In the past few years we've seen massive layoffs on Wall Street. We've read of the demise of Lehman Brothers and Bear Stearns and of the euphemistic reductions in force at Merrill LynchWells Fargo,UBS, JP Morgan, Goldman Sachs, and Morgan Stanley.  All of that history is bad enough; however, sometimes the explanations for why an individual's registration was terminated suggests improper motivations - and sometimes the explanation is so blandly written as to instigate a whole host of erroneous inferences.  Whatever the exact facts in Claimant's case - and it frustrates the hell out of me that the disputed wording was not referenced in the Decision - she seems to have entered into the litigation with the primary goal of restoring her good name and clearing her professional record.  To that extent, she hung in there, fought the good fight, and appears to have won the vindication that she sought.

For additional FINRA expungement arbitrations, READ: