April 29, 2022
In a FINRA Arbitration Statement of Claim filed in July 2020, associated person Claimant Fasanella asserted wrongful termination; breaches of contract, implied contract, and of duty of good faith and fair dealing; defamation; defamation per se; tortious interference with a business relationship and with a contract; and violation of industry rules.
In the Matter of the Arbitration Between Gerald Fasanella, Claimant, v. Cetera Advisors, LLC, Respondent (FINRA Arbitration Award 20-02425)
As asserted in the FINRA Arbitration Award, the "causes of action relate to Claimant's allegation that Respondent engaged in a pre-meditated scheme to defame and wrongfully terminate Claimant's employment with Respondent." In addition to an expungement of disclosures on his Central Registration Depository record ("CRD"), at the FINRA arbitration hearing, Claimant Fasanella sought between $1.5 and $3.6 million in damages plus punitive damages and $10,000 in expert witness fees.
Respondent Cetera Advisors generally denied the allegations and asserted affirmative defenses.
The FINRA Arbitration Panel found Respondent Cetera Advisors liable to and ordered it to pay to Claimant Fasanella $3 million in damages, $10,000 in expert witness fees, and $375 in reimbursed filing fee. Further, the Panel assessed all $29,250 in pre-hearing and hearing sessions fees against Respondent Cetera Advisors as well as a $1,125 postponement fee.
The Panel recommended "expungement based on the defamatory nature of the information." Accordingly, the Panel recommended that the "Reason for Termination" be revised to "Voluntary," and that the "Termination Explanation" should be deleted and revised to a blank field. Further, the Panel recommended the expungement of all reference to two Occurrence Numbers on Claimant's CRD.
Bill Singer's Comment
Online FINRA BrokerCheck records as of April 29, 2022, disclose that Fasanella was first registered in 1978 with Merrill Lynch, Pierce, Fenner & Smith, and from 2014 to August 2019, he was registered with Cetera Advisors LLC. The termination at issue in Fasanella's FINRA arbitration appears to have been filed in July 2019 as a "discharged" event by Cetera. His status is disclosed as "not currently registered."
Although the FINRA Arbitration Award in Fasanella discloses the causes of action, no specifics are offered as to the facts involved. To some extent, that's an understandable bit of obfuscation afforded to an associated person victimized by defamation. By not reiterating the now-deemed-as-defamatory allegations, the Award spares further harm to the victim's reputation. That being noted, it's still frustrating to come across an award of $3 million and have no idea as to how it was calculated, why it was awarded in terms of specific findings, and why the Panel declined to recommend a regulatory inquiry by FINRA as to the conduct of a member firm found liable under such circumstances.
Regardless of the imperfections of the Award and FINRA's expungement process, Claimant Fasanella's lawyers did a wonderful job in securing a seven-figure Award. Compliments to