The Art of Fine Tuning FINRA Arbitration Damages: The $75 Million Claim

June 27, 2011

In a Financial Industry Regulatory Authority ("FINRA") Arbitration Statement of Claim filed in March 2009, Claimants Bellantuono and Gusmano asserted causes of action for defamation on Bellantuono's Form U5, wrongful termination, and failure to pay compensation. Claimants Bellantuono and Gusmano sought unpaid 2008 compensation of not less than $591,938.35 and $20,000.00, respectively; plus interest; available remedies under the New Jersey Wage Payment Law, and such other and further relief as the Panel deems appropriate.  Separately, Claimant Bellantuono sought damages resulting from ICAP's defamation (including expungement and/or amendment of his Form U5) and the wrongful termination of his employment (at an annual compensation rate of approximately $2,500,000.00, plus punitive damages, interest, attorneys' fees, and costs). In the Matter of the FINRA Arbitration Between Joseph Bellantuono and Anthony Gusmano, Claimants, vs. ICAP Securities USA LLC, Respondent  (FINRA Arbitration 09-00567, June 22, 2011).

Not Going Down Without a Fight

Respondent ICAP generally denied the allegations, asserted various affirmative defenses, and filed a Counterclaim alleging, among other things, unjust enrichment and breach of employment agreement.  Respondent sought full reimbursement and compensation to ICAP for any fines or penalties imposed in connection with a Securities and Exchange Commission ("SEC") investigation; any losses ICAP suffers or has suffered; any other financial harm ICAP has suffered as a direct and proximate consequence of Claimants' violations of ICAP's policies and procedures relating to certain brokering and related practices; full compensatory damages; the cost of collection and of this proceeding, including attomeys' fees and forum fees; and any and all further relief that the FINRA Arbitration Panel deems just
and proper.

One Drops Out

At the commencement of the hearing, Claimant Gusmano withdrew his claims and did not participate at the hearings but was represented by counsel.

Once More for Good Measure

At the close of the hearing, Claimant Bellantuono requested damages for:

  • violation of New Jersey Wage Payment Law of approximately $550,000.00;
  • breach of contract in the amount of $8,166,000.00;
  • defamation and wrongful termination in the amount of $26,264,000.00; and
  • emotional distress and reputational damages in the amount of $15,000,000.00.

Claimant further sought punitive damages in the amount of $25,000,000.00; sanctions; attorneys' fees; and costs.

SIDE BAR:  How much to ask for in damages is often a tricky proposition.  If you ask for too much, you run the risk of alienating the arbitrators, who may view such an excess as damaging your credibility - thus inviting them to hack and slash at your requested dollars.  Veteran lawyers fully appreciate that damages may well be an evolving number, and often find themselves arguing as much with their client as their adversary over what's "fair" for starters and when to adjust the number - and whether to go higher or lower with any revision.

In this arbitration, we see that a Claimant(s) damages can change as the case moves through various stages. There may have been one number thrown out by the Claimants during settlement negotiations before the Statement of Claim was filed.  Then there was the opening salvo: the numbers set forth in the initial Statement of Claim. The damages may often rise and fall in an Amended Statement of Claim, which often includes considerations that arose during the Discovery Phase of the litigation but before the hearings commenced.  Finally, after testimony is concluded and the case is now fairly well explored and the issues presented, the parties may once more submit revised damage calculations to the Panel.  Keep in mind that by the time this case went to trial that one of the two Claimants had dropped out.


The Panel found Respondent ICAP liable and ordered it to pay to Claimant Bellantuono compensatory damages in the amount of $643,500.00 plus interest at the rate of 5.5% per annum from June 7, 2011 until full payment of the Award.

Bellantuono's request for expungement  and Respondent's Counterclaims were denied.