Former Lehman Brothers Holdings Inc. broker Paul Tanner won a Finra arbitration case last Monday against his former employer.
As a result, the broker doesn't have to pay back $337,000 left on a forgivable loan that the now-bankrupt firm gave him in 2004.
The Financial Industry Regulatory Authority Inc. panel ruled that Mr. Tanner doesn't have to pay Lehman the remaining balance on the loan, nor any interest, attorney's fees or collection costs for which the firm was suing. It also ruled that Lehman has to pay him the $600 nonrefundable portion of a counterclaim filing fee and more than $10,000 in hearing session fees charged by Finra.
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Former Lehman Brothers Holdings Inc. broker Paul Tanner won a Finra arbitration case last Monday against his former employer.
As a result, the broker doesn't have to pay back $337,000 left on a forgivable loan that the now-bankrupt firm gave him in 2004.
The Financial Industry Regulatory Authority Inc. panel ruled that Mr. Tanner doesn't have to pay Lehman the remaining balance on the loan, nor any interest, attorney's fees or collection costs for which the firm was suing. It also ruled that Lehman has to pay him the $600 nonrefundable portion of a counterclaim filing fee and more than $10,000 in hearing session fees charged by Finra.
"PRETTY UNUSUAL'
“It's pretty unusual for brokers to win these kinds of cases,” said Jeffrey Sonn, a lawyer with Sonn & Erez PLC, who represented the former Lehman broker. “This is a big deal.”
Indeed, Mr. Tanner's win in the promissory-note flap appears to be an exception to the rule.
Lehman, which filed for bankruptcy protection in 2008, identified 113 notes that it planned to collect from former brokers. The total loan balance of those notes was just under $80 million, with Lehman demanding repayment on $51 million of that total.
As of the end of January, Lehman spokeswoman Kimberly Macleod said that the firm had settled 45 cases for the full value of the loan balances.
Of the 20 cases that have gone to arbitration, Lehman has won at least the full principal amount and costs of collection in 15, she said.
Thirteen cases involving promissory notes are yet to be resolved, Ms. Macleod said.
Mr. Sonn argued that his client was also due $1.7 million for referral fees on investment banking business that he brought to Lehman. Mr. Tanner kept e-mails and documents indicating that he was the source of many banking deals for Lehman, Mr. Sonn said.
The panel didn't award Mr. Tanner his counterclaims.
