A FINRA arbitration panel found Suntrust Securities (now known as SunTrust Robinson Humphry), the securities brokerage arm of SunTrust Banks, Inc., guilty of defaming one of its former brokers. The award included $1.2 million dollars in compensatory damages, $2.5 million in punitive damages plus attorney’s fees and cost. Punitive damages are typically used to punish the wrong doer and dissuade similar conduct in the future. The punitive damage award was the arbitration Panel way of sending a message that such conduct will not be tolerated. The full Wall Street journal article appears below.
A Financial Industry Regulatory Authority arbitration panel has ordered SunTrust Robinson Humphrey, Inc. to pay a
total of $4.1 million to a former institutional salesman who alleged the
company defamed him in a regulatory filing.
Lance B. Beck, a former broker in the Atlanta branch of Suntrust
Robinson Humphrey, the corporate and investment banking services arm of
SunTrust Banks, Inc. (STI), was awarded $1.2 million in compensatory
damages, an additional $2.5 million in punitive damages and $419,000 in
attorney’s fees, according to an arbitration order dated Dec. 29.
A statement of claim filed in the case by Beck accused the firm of
including a “devastating” disclosure on his Form U5, which brokerages
must file with regulators when a broker leaves, related to a $2.9
million auction-rate securities transaction. The Finra panel recommended
the language, which included the designation “permitted to resign” as a
reason for Beck’s termination and the phrase “failure to follow firm
sales-practice policy,” be expunged.
A spokesman for SunTrust Banks didn’t immediately return a call
The attorneys at Colling, Gilbert, Wright and Carter represent brokers and financial advisers in employment related disputes.