by Bill Singer
FINRA Arbitration Panel Awards $1 Compensatory Damage Against Former Employee
September 27, 2010
In a Statement of Claim filed in May 2008, Claimant Obsidian Financial Group,
LLC sought a permanent injunction against its former employee Vincent D. Bentivegna in
order to prevent him from misusing the firm's allegedly confidential,
proprietary, and trade-secret information. Claimant Obsidian sought to
compel Respondent Bentivegna to immediately return records and to restrain him
and others from improperly soliciting clients. Also, Claimant requested an order
from the FINRA Arbitration Panel allowing the firm to inspect Respondent's
computers, after which Respondent Bentivegna would be required to purge certain
allegedly improperly obtained information and to impose a constructive trust on
all income derived from any unlawful conduct. In addition to injunctive relief,
Claimant sought compensatory damages in an amount to be determined by the Panel
plus attorneys' fees and costs (at the close of the hearing, said damages were
calculated by the Claimant as between $22,- and $23,000). In support of its
damage claims, Claimant Obsidian asserted breach of employment agreement, theft
of trade secrets, breach of fiduciary duty, and post-departure breaches of
fiduciary duty, usurpation of a corporate opportunity, unfair competition, and
conversion. In the Matter of the
Arbitration
Between Obsidian Financial Group, LLC, Claimant,
v. Vincent D.
Bentivegna, Respondent (FINRA
Arbitration 08-01373, September 22,
2010).
Respondent Bentivegna denied the allegations made in the Statement of Claim and
asserted various affirmative defenses.
The FINRA Arbitration Panel found that Respondent Bentivegna was liable and
ordered him to pay to Claimant compensatory damages in the amount of $1.00.
Claimant's request for a permanent injunction was denied.
Bill Singer's Comment: For starters, that's not a typo for
the awarded damages -- it's $1, as in one buck. While you are free to infer
whatever you wish, it's pretty clear that the combination of the lousy
one-dollar damage award and the denial of injunctive relief was far from a
victory for Claimant Obsidian. Frankly, it's pretty much a slap in the face
delivered from back of an arbitration panel's hand. True, Respondent
Bentivegna was found "liable" but that appears to have been a verdict rendered
with some dripping sarcasm.
Those of you familiar with the BrokeAndBroker Blog may recall our June 2010
article about another Obsidian FINRA Arbitraion: "Former
Associated Persons Slam FINRA Member Firms in Arbitration" at http://www.brokeandbroker.com/index.php?a=blog&id=467
. In that case, three former employees sought unpaid commissions from three
Respondent firms (one of which was subsequently dismissed from the case).
Obsidian was one of the two remaining respondents. As reported in that blog:
In relatively harsh language the Panel noted that: