NY Life Rep Crosses Arbitration Rubicon With Expungement Case

September 28, 2016

A former registered representative sued his former employer for six figures in damages. The causes of action were impressive. The Financial Industry Regulatory Authority's online BrokerCheck disclosed negative comments about the reasons for the challenged discharge but there were also some mitigating explanations included. Ultimately, the former employee came to the shimmering waters of the Rubicon and decided to cross. Was that the right decision in foresight and hindsight? Read today's BrokeAndBroker.com Blog and decide for yourself.

Case In Point

In a Financial Industry Regulatory Authority ("FINRA") Arbitration Statement of Claim filed in March 2015, former NY Life Securities registered representative Broomer asserted negligence, breach of covenant of good faith and fair dealing, tortious interference with prospective business relations, defamation per se, violation of FINRA rules and regulations and false imprisonment. 

False imprisonment? Given the nature of that last cause of action, I think it's fair to infer that Claimant Broomer's termination from NY Life Securities wasn't a Champagne-fueled, warm and fuzzy event. Claimant Broomer sought compensatory and punitive damages, attorneys's fee, costs, fees, and an expungement of his industry record. At the close of the hearing, Claimant requested $807,586.20 in compensatory damages. In the Matter of the FINRA Arbitration Between Gregory Y. Broomer, Claimant, vs.NY Life Securities LLC, Respondent (FINRA Arbitration 15-00626, September 1, 2016).

Motion to Dismiss

Respondent NY Life Securities generally denied the allegations and asserted various affirmative defenses. 

After Claimant Broomer presented his case-in-chief, Respondent New York Life Securities filed a Motion to Dismiss, which Claimant opposed. The FINRA Arbitration Panel granted the motion after finding "the reason for termination on Claimant's CRD records to be true." Accordingly, the FINRA Arbitration Panel dismissed Claimant's claims with prejudice and denied his request for expungement.

Bill Singer's Comment

According to online FINRA BrokerCheck records as of September 28, 2016, NY Life Securities "Discharged" Broomer on September 30, 2014, based upon allegations that:


The BrokeAndBroker.com Blog frequently covers Wall Street employment litigation and attendant expungement filings; and, as such, this is an excellent opportunity to once again offer some pithy observations about the perils and pitfalls of such matters.

Terminable at Will

By and large, most Wall Street employees fall into the basket of "terminable at will," which, reduced to some very general basics, essentially means that in the United States of America, you typically serve at the pleasure of your employer, who is vested with the discretion and prerogative to kick your ass to the curb for any reason except if such a termination involves certain protected categories of employers or crosses over the line into what is colloquially referred to as "illegal."  The water-cooler lawyers who assert that you can only be fired for "good cause," are conflating the terminable-at-will doctrine with employment protections offered to employees covered under a collective bargaining agreement or through contractual negotiation.  

Now don't misunderstand: There are many, many wrongful terminations of terminable-at-will employees that take place daily, and many of those terminations will wind up before the Equal Employment Opportunity Commission, a state labor department, or on the desk of a lawyer who specializes in employment law. On the other hand, a large  number of employment disputes simply involve a disgruntled employee who is angered by the circumstances of his or her termination but, in the end, is left with no legal remedy beyond licking one's wounds and getting on with one's life. 

In the USA, is if you're not a union employee or you don't have an employment contract setting forth the terms by which your employment may be terminated by your employer, you're likely terminable-at-will. Obviously, as with any purported general rule of law, always -- and I mean ALWAYS -- consult with a qualified lawyer to confirm whether your facts fall within or outside of such folksy beliefs.


Among the problems inherent in discussing FINRA employment/expungement arbitrations is that we rarely, if ever, are provided with sufficient facts to understand what happened. If we start with Broomer's BrokerCheck disclosure, we are informed by his former employer that the registered rep was discharged for allegedly engaging in "unprofessional conduct." What is unprofessional conduct -- and, pointedly, what did Broomer exactly do to earn that label? Alas, we are not told. By way of a bit of sop for its former employee, New York Life Securities did at least concede that the alleged misconduct did "not involve fraud or wrongful taking of property and no sales practice issue or securities products were involved." 

To Hire of Not

Imagine that Broomer applies for a job with another Wall Street firm and the interviewer reads the BrokerCheck commentary. In the negative column is that unprofessional thing. In the plus column is that whatever the unprofessional thing was, it didn't appear to involve any customer or any issue that would rise to a regulatory or compliance level. Having exhausted that plus and minus approach, the interviewer is likely perplexed: So . . . just what the hell did Broomer do?

The interviewer might then come across the FINRA arbitration in which Broomer alleged that his former employer engaged in negligence, breach of covenant of good faith and fair dealing, tortious interference with prospective business relations, defamation per se, violation of FINRA rules and regulations and false imprisonment. The interviewer would also note that Broomer was demanding over $800,000 in damages. You may well think that presenting proof of having sued the former employer, setting forth the causes of action, and noting the monetary claim would help a former employee demonstrate the sincerity of his or her grievances against a former employer -- and, yes, you're correct, that much may have been accomplished. But let's also consider the residual impact of such disclosures. A potential new employer is now interviewing someone who has, in fact, sued a former employer.  The question now arises as to whether a new employer wants to hire someone with a track record of not merely complaining about a so-called wrongful termination but has taken the further steps of hiring a lawyer, filing a complaint, and washing the dirty laundry in public. 

Crossing the Rubicon

Julius Caesar understood that a decision to cross the Rubicon involves the throwing of dice and the courage to accept that you will have to live with the outcome: Iacta alea est. As such, once Broomer hired a law firm and filed his arbitration, he needed to accept the consequences of victory or defeat. Sadly, the dice rolled the number of defeat.  When embarking on employment litigation, far too many Claimants/Plaintiffs seem to only consider the likelihood of winning. That is foolishness. 

In Broomer's case, the arbitration loss not only gives credence to his former employer's actions and likely raises further questions about his "professionalism," but, worse, he is now forced to confront a finding by independent arbitrators that the reasons for termination offered by New York Life Securities are "true." On top of that, the arbitrators denied his requested expungement. Perhaps forever lost as a result of the arbitrators's findings is Broomer's ability to pre-emptively argue his version of events that led up to his termination. If, in fact, we accept the FINRA Arbitration Decision's finding that Broomer was properly fired and we incorporate by reference the allegations of unprofessional conduct set forth on BrokerCheck, then we may wind up with the warranted or unwarranted conclusion that he was fired for unprofessional conduct and that such action was found reasonable by an independent panel of arbitrators, who, by the way, denied the requested expungement.

What, then, does my commentary mean? It means that you need to carefully think through any employment litigation, especially when you plan to remain in the same industry and especially if the allegations against you are not so serious as to raise compliance and regulatory questions about you. You can argue and debate a former employer's actions against you with far more credibility if you have not lost an employment case in arbitration or court on the same facts. That's merely commonsense. On the other hand, you can't always run scared of losing a case and use that fear for the only reason to not sue. 

Courts and arbitration forums do not render justice, which is an elusive goal. At best, courts and arbitration forums issue opinions and awards, which are sometimes supported by the facts and often not. Life and law are both messy. 

In the end, history remembers Caesar as the conquering general and Roman Consul because, in part, he successfully crossed the Rubicon. Imagine what history's verdict would have been had he drowned in the crossing or was defeated before the gates of Rome. And while you're sorting all of that out, you might ponder whether Caesar's crossing of the river also set in motion his assassination. Sometimes, no matter what you do, it ends badly.