An irreverent Wall Street Blog
by Bill Singer
by Bill Singer
Stockbroker U5 Defamation And Wrongful Termination Case Backfires
August 21, 2014
In a Financial Industry Regulatory Authority ("FINRA") Arbitration Statement of Claim filed in January 2013, registered person Claimant Jeffords alleged:
- breaches of contract and the covenant of good faith and fair dealing;
- Uniform Termination Notice for Securities Industry Registration ("Form U5") defamation;
- tortious interference with contractual relations;
- unjust enrichment;
- wrongful termination/constructive discharge; and
- negligence in connection with the termination of his employment by Respondent.
- $1,059,660 for breach of the Team Agreement executed by Claimant on or about October 17, 2010,
- $1,734,243.00 for loss of retirement income;
- $500,000.00 for reimbursement of a customer settlement; and
- $5,000,000.00 in punitive damages
In the Matter of the FINRA Arbitration Between John Archie Jeffords, Claimant, vs. J.J.B. Hilliard, W.L. Lyons, LLC, Respondent (FINRA Arbitration 13-00328, August 13, 2014).
Respondent generally denied the allegations and asserted various affirmative defenses.
Decision
The Panel denied Claimant's claims and his request for expungement.
The Panel found Claimant liable for and ordered him to reimburse Respondent for $143,588 in attorneys' fees; and $43,801 in costs.
Bill Singer's Comment
Oh my! You file a lawsuit seeking about $9 million in damages against your former employer and, in the end, not only are you on the hook for you legal fees and costs but the arbitrators slam you with nearly $190,000 in your adversary's fees and costs. Turnaround ain't always such fair-play.
According to online FINRA records, Jeffords was first registered in 1975 and was associated with Respondent from August 2001 through March 2011. Further disclosure indicates that on March 25, 2011, Respondent permitted Jeffords to resign subject to allegations that:
MR. JEFFORDS PARTICIPATED IN A PRIVATE SECURITIES TRANSACTION WITHOUT PRIOR WRITTEN PERMISSION FROM THE FIRM.
Online FINRA records also disclose that on April 20, 2009, Respondent received a customer complaint seeking $975,273.08 in damages based upon allegations that:
CLIENT'S ESTATE ALLEGES THE RR SOLICITED A LOAN ON BEHALF OF AN OUTSIDE ENTITY, BLACKHAWK LOGISTICS, LLC, IN THE AMOUNT OF $900,000 AND THAT BLACKHAWK HAS DEFAULTED ON ITS OBLIGATIONS. THE ESTATE ALSO ALLEGES THE RR FAILED TO DISCLOSE HIS OWN LOAN TO BLACKHAWK LOGISTICS.
It appears from additional online FINRA records that the customer dispute became a civil proceeding in South Carolina State Court that subsequently settled on March 11, 2011, in the amount of $500,000, apparently without any admission of liability by the Respondent or Claimant. Huggins v. J.J.B. Hilliard, W.L Lyons and Jeffords(Court of Common Pleas, South Carolina, Order, 2009-CO-10-3433).