Finra panel orders Raymond James to pay former broker more than $500,000 for defamation

Arbitrators include $100,000 sanction for firm's foot-dragging in producing documents

Sep 17, 2019 @ 4:35 pm

By Mark Schoeff Jr.

Finra arbitrators ordered Raymond James Financial Services Inc. to pay a former broker more than $500,000 for treating her unfairly while dismissing her.

The three-person, nonpublic-majority Financial Industry Regulatory Authority Inc. arbitration panel recommended the removal of defamatory termination language in Diana Marie Petersen's Form U5.

In the award document, the panel said it "portrays [her] in an extremely negative light making it quite difficult if not impossible for her to obtain new employment in the financial services industry."

Ms. Petersen was given a five-day notice of termination on Oct. 27, 2015, that was to take effect on Nov.1, 2015. The amended explanation for her firing said that no reason was given and that it was not for cause. It also said she "engaged in a number of minor violations" of firm policy and "was in conflict with her supervisor."

The termination explanation, as approved by the arbitrators, goes on to say that after serving her the notice of termination, Raymond James found that Ms. Petersen had signed her husband's name to a letter her husband had authorized in connection to a trust that was a Raymond James client. That was a violation of firm policy and led to her firing on Nov. 10, 2015.

Ms. Petersen's actions did not involve an investment. She is no longer in the industry, according to her BrokerCheck profile.

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The arbitrators awarded Ms. Petersen $360,000 in compensatory damages and $1,100 in costs. They also required Raymond James to pay 10% interest per annum on the damages from Jan. 22, 2018, through Aug. 19, 2019. That added more than $50,000 to the award.

The arbitrators also made Raymond James pay Ms. Petersen an additional $100,000 for violating the panel's orders to turn over documents in discovery.

They were incensed by the firm's "litany of excuses" for failing to meet deadlines in producing the evidence.

"The sanctions represent an indication of conduct that should not go on," said Ms. Petersen's lawyer, Michael Mahoney, a partner at Mahoney Lefky.

Mr. Mahoney said Ms. Petersen could not sell her book of business of about $900,000 because of the language Raymond James used to describe her departure. He was happy with what she was able to recover through arbitration.

"It's a significant victory for Diana," Mr. Mahoney said. "She is satisfied she got a fair hearing and that she needs to be paid for the damage that was done to her."

A Raymond James spokesman declined to comment.

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