A FINRA arbitration panel is ordering SunTrust Robinson Humphrey, Inc. to pay $4.1 million to a former institutional salesperson who claims he was defamed in a regulatory filing and wrongfully terminated. SunTrust Robinson Humphrey is the corporate and investment bank services unit of SunTrust Banks, Inc.
Lance B. Beck, who worked for the company 19 years and sold debt securities, claims he was slated to gross more than $3 million when, following the auction-rate securities market collapse, he was let go. According to a regulatory filing for the former institutional salesman, his case against his former employer involves a $2.9 million ARS transaction with a institutional customer. SunTrust later decided to repurchase the securities.
Beck is accusing SunTrust of making disclosures on his Form U5 that were “devastating,” and prevented him from getting hired by other companies or take his book of business with him. Beck wanted certain language in the form, which brokerage firms have to submit to regulators when a broker leaves the company, expunged.
A FINRA panel has recommended expungement. It noted that a review of Beck’s firing showed that the brokerage firm’s allegations against him were false and “intended to defame” so that another brokerage firm wouldn’t want to hire him and prevented him from taking his clients with him.
Beck was awarded $1.2 in compensatory damages, $419,000 in lawyer’s fees, and $2.5 million in punitive damages.
“Recovery for statements made in regulatory filings are very difficult to obtain,” says Shepherd Smith Edwards & Kantas LTD LLP founder and securities fraud attorney William Shepherd, who has represented a number of licensed securities persons. “No attorney should attempt to represent securities persons without a full understanding of the law and background concerning such claims, as well as the experience to handle these claims in securities arbitration.” Shepherd was himself licensed in securities and served as a vice president at several major Wall Street firms for 20 years. He also obtained a Masters Degree in Securities Regulation (LLM) from Georgetown Law School and has been a securities attorney for more than 20 years.
Related Web Resources:
SunTrust Robinson Humphrey to pay $4.1 mln in defamation case, Marketwatch, January 4, 2010
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