Merrill Lynch, Edward Jones, Large Hotel Man, And Double Charges For A Few Glasses Of Wine

October 24, 2014

Voices were raised, a waitress was upset, and large man with hotel bar intervened. Now if that doesn't pique your interest, I might as well get myself a glass of Merlot, and, trust me, I hate Merlot -- and when I say that I "hate" Merlot, keep in mind that before I became a lawyer, I was the third generation of my family in the wine business; but, I digress. Hey, it's my blog; you don't like my digressions, go read something else. In fact, why don't you get yourself a thin, watery, lousy glass of insipid Merlot while you're at it? And have yourself a chaser of Pinot Grigio.

Bottle of Wine

In a Financial Industry Regulatory Authority ("FINRA") Arbitration Statement of Claim filed in July 2013, Claimant Clay alleged breach of employment contract; fraud; intentional interference with business relationship; and defamation. Claimant asserted that Respondent Edward Jones breached his employment agreement and purposefully placed defamatory language on his Uniform Termination Notice for Securities Industry Registration ("Form U5"). Additionally, Claimant Clay alleged that Respondent Edward Jones had intentionally interfered with his other job opportunities and industry business relationships. At the close of the FINRA arbitration hearing, Claimant sought $300,000 in compensatory damages, costs, and an expungement of the cited language from his Form U5. In the Matter of the FINRA Arbitration Between Keith Clay, Claimant, vs. Edward D. Jones & Co., LP d/b/a Edward Jones, Respondent (FINRA Arbitration 13-02272, October 3, 2014). 

On or about September 5, 2014, Claimant Clay voluntarily dismissed the fraud, breach of contract and intentional interference claims. 

Respondent Edward Jones generally denied the allegations and asserted various affirmative 

Red Red Wine

The FINRA Arbitration Panel recommended:
  • the "Reason For Termination" be changed to "Other;" and 
  • expungement of the "Termination Explanation" on Claimant's Form U5 and its replacement with the following:
Conduct deemed inappropriate not securities or client related; to wit, participating in a verbal dispute over possible double charges for 3 glasses of wine, involving Keith Clay and 2 or 3 other parties.

Spill The Wine

In providing its rationale, the Panel explained that:

The testimony presented indicated a misunderstanding occurred in a hotel bar, where some of the Respondent's Trainees (including Claimant) and officials were staying. Claimant thought he was being double charged for a few glasses of wine. He admitted to having had a couple of glasses of wine over an hour or so, but denied being drunk. Voices were raised, a waitress was upset, and large man with hotel bar intervened. When the manager arrived, the matter was resolved. Testimony varied as to whether or not Claimant used strong language. There was no physical altercation; however the large hotel man intervened vigorously. The matter was reported to Respondent's officials by the manager and by Claimant's roommate for the training (who had witnessed some of the incident) later in the evening and the next day. Respondent's officials made no effort to contact hotel personnel. Respondent's official stated the termination decision was influenced by Claimant's attitude when questioned - his lack of remorse and lack of any admission of improper conduct. 

There was no claim of improper discharge. However, Claimant maintained the U5 was defamatory; especially the use of the word "unprofessional" as a modifier of "mis-conduct," because it suggested Claimant could have been guilty of gross or serious misconduct. Claimant was turned down for a position with Merrill Lynch because of the U5 statement. The Panel does not award damages as requested because there was no showing of malice or gross negligence on the part of Respondent. 

Bill Singer's Comment

Folks, it's finally happened. The loquacious Bill Singer is left speechless. I can't improve one whit on this arbitration panel's incredible rationale. It is a thing of beauty. A tale told by great raconteurs. As such, my hat's off to these arbitrators. Job well done!

In the spirit of today -- a Friday -- I offer my loyal readers three musical interludes. If you crank up the volume on your computer or smartphone speakers, perhaps you can get everyone in the office to join along.  Join me on a trip down memory lane where we hear that wonderful song from 1967: "Bottle of Wine" performed by the Fireballs. As an added attraction, I offer you UB40's "Red, Red Wine" and Eric Burdon and War's "Spill The Wine."