Brokerage firm Edward Jones on Monday was ordered by an arbitration panel to pay a former representative $100,000 in damages.
Marc Miller, who left Jones in October 2008 for Morgan Keegan & Co. Inc. in Sarasota, Fla., claimed that Jones defamed him on his U-5 termination report and breached an agreement to clear his record.
George Guerra, Mr. Miller's attorney at Wiand Guerra King PL, said Mr. Miller resigned from Jones, but the firm claimed that he had been terminated for a "laundry list" of alleged problems, including unauthorized use of margin and misuse of his expense account.
As a result of the tarnished U-5, Mr. Miller had to withdraw pending registrations from several states, Mr. Guerra said.
In addition, as it normally does with negative U-5 filings, the Financial Industry Regulatory Authority Inc. opened an investigation into Mr. Miller's conduct.
“When we [saw the U-5], we were stunned,” Mr. Guerra said. “Jones knew this is what would happen to the guy.”
Mr. Guerra said Jones ultimately agreed to amend the U-5 and inform Finra that the firm's own investigation found no problem with Mr. Miller.
But Jones backtracked on that agreement, he said. The firm would not tell Finra that it had completed an investigation of Mr. Miller, Mr. Guerra said.
"Edward Jones agreed to the expungement of Marc Miller's U-5, which was cleared more than a year ago," said Jones spokesman John Boul in a statement. "We're pleased the matter has been resolved."
Although Mr. Miller's award counts as a rare win in a defamation case, it still comes up short, Mr. Guerra said.
Mr. Miller had asked for $750,000 in damages, $120,000 in attorney's fees and $3 million in punitive damages.
The $100,000 award isn't enough to keep a firm from retaliating against a defecting broker, Mr. Guerra said.
Mr. Miller also had to wait for more than two years to get justice, Mr. Guerra added.
The broker had to file a new arbitration claim in 2009 after the first settlement agreement fell through, he said.