Broker Cases

The Iavarone Law Firm obtained an award of compensatory $475,000 in compensatory damages and $50,000 in punitive against Morgan Stanley Smith Barney in FINRA Arb. No. 12-03180 for filing a defamatory U-5 submitted when the Claimant was terminated. The arbitration panel further ordered changes to the broker’s U-5 to remove the defamatory statements.

In Case No. 12-03180, The Iavarone Firm obtained a $450,000 compensatory damages and $50,000 in punitive dames for a claim that Morgan Stanley filed a defamatory Form U-5 stating that the broker had been terminated for violation of firm procedures related to political activity. The evidence establish that the internal investigation was severely flawed and that the reason for termination was pre-textual. The Panel also ordered that the broker’s U-5 be amended accordingly.

In Case No. 11 CH 15108, The Iavarone Law Firm succeeded in having the Circuit Court in Chicago vacate a FINRA award obtained by Banc of America Investment Services (BAIS) against a former broker regarding a claim for the alleged balance owed on a forgivable note. The arbitration panel denied the broker’s claim that he had been induced to join BAIS through misrepresentations about the firm’s services made during his recuritment and awarded BAIS the amount of the loans, interest, and attorney’s fees. Successful court challenges to overturn arbitration awards are extremely rare. In this case, the Iavarone Law Firm challenged the award on the grounds that the arbitration panel, in general, and the chairman of the panel, in particular, displayed evident partially for Banc of America investment Services during the arbitration process. At one point, the arbitration panel had attempted to have the broker proceed to hearing without an attorney and with a very limited ability to call witnesses after the broker’s previous attorney withdrew. The broker then retained the Iavarone Law Firm who immediately filed for a temporary restraining order to prevent the hearing from proceeding as scheduled. While the Iavarone Law Firm was successful in continuing the hearing and in obtaining the right to call witnesses, the Panel continued to exhibit bias against the broker and refused to recuse itself. The court, in addition to vacating the arbitration award ordered that FINRA appoint a new panel to hear the matter. In the new hearing, the Iavarone Law Firm will be pursuing the broker’s claim that he was fraudulently induced to join BAIS.

FINRA Arb. No. 08-03070 involved a claim for in excess of $750,000 on a forgivable loan. The arbitration panel ruled that the broker had to repay zero dollars on the forgivable note he had signed.

FINRA Arb. No. 06-01261 involved a claim for back-end compensation as well as a claim for sexual harassment. The broker had sold a large piece of business and a campaign of harassment to force her to leave before the back end compensation vested. In the ensuing arbitration, Nick obtained the broker’s entire $260,000 in back-end compensation plus $200,000 for sexual harassment as well as $80,000 in attorney’s fees.

FINRA Arb. No. 04-00256 involved the filing of a false U-5 in which The Iavarone Law Firm recovered $830,000 in compensatory damages and $1.3 million in punitive damages.

FINRA Arb. No. 97-00018 was a marathon and reflects the tenacity with which Nick represents his clients. The case began when the broker left and his former firm stopped the ACATS transfers in mid-stream. Nick went to court, obtained a TRO that required the firm to honor the ACATS transfers and successfully resisted an attempt by the firm to remove the case to federal court and convinced the court to force to firm to pay Nick’s fees. Then, Nick filed an arbitration and obtained an award that compensated the broker for his lost income while the ACATS transfers were blocked, punitive damages as well as attorney’s fees and a disciplinary referral of firm. The case was featured in Registered Rep Magazine. Click here to read the atricle.