A Finra arbitration panel ordered J.P. Morgan Securities to pay $1.4 million in damages to a former financial adviser who sued the firm claiming it had dirtied up his employment history when he was "discharged," meaning fired, almost five years ago.
According to the arbitration award by the Financial Industry Regulatory Authority Inc. panel, the adviser, Dustin B. Luckett, alleged in his arbitration claim that the employment form, called a Form U5, that J.P. Morgan filed was defamatory.
Luckett asserted the following, according to the award: invasion of privacy, tortious interference with prospective business expectancies and other claims after he stopped working at J.P. Morgan Securities in June 2017.
Firms are required to file registration records with regulators when an adviser stops work. It's widely believed by many in the industry that firms can take advantage of the U5 system to harm advisers' reputations.
According to Luckett's BrokerCheck profile, he was fired after asking a co-worker to notarize a document a client had signed without the client being present. J.P. Morgan Securities also claimed Luckett "engaged in conduct it deemed inconsistent with its anti-retaliation policies."
The arbitration hearing took place in Louisville, Kentucky.
A spokesperson for JPMorgan Chase declined to comment on the matter.
"Luckett is very pleased with the award," said his attorney, Michael A. Valenti. "A big part of that is to clear his name, and the arbitration panel's recommendation of full expungement with favorable language is what he’s been fighting for for years."
The Finra arbitration panel gave no reasoning for its decision, which was dated Feb. 4. Luckett worked at Chase Investment Services Corp. and J.P. Morgan Securities from 2011 to 2017. The panel also recommended that the company expunge or change the language on his employment history to reflect that the reasoning wasn't related to investments but rather a dispute over the clerical process of notarizing.
"I believe all assertions placed on my Form U5 were purposely put there in order to hamper my future employment prospects and coerce existing client to remain" with JPMorgan Chase, Luckett wrote on his BrokerCheck report in response to the firm.
Luckett, who's no longer registered with a brokerage firm, originally asked for more than $4.2 million in damages, according to the award. Valenti, his attorney, said he was working at a bank.
While industry statistics pointing to a succession crisis can cause alarm, advisor-owners should be free to consider a middle path between staying solo and catching the surging wave of M&A.
New joint research by T. Rowe Price, MIT, and Stanford University finds more diverse asset allocations among older participants.
With its asset pipeline bursting past $13 billion, Farther is looking to build more momentum with three new managing directors.
A Department of Labor proposal to scrap a regulatory provision under ERISA could create uncertainty for fiduciaries, the trade association argues.
"We continue to feel confident about our ability to capture 90%," LPL CEO Rich Steinmeier told analysts during the firm's 2nd quarter earnings call.
Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.
Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.
