Advisor gets $200,000 from Ameriprise in 'emotional distress' lawsuit

A former Ameriprise Financial Services financial advisor won a $200,000 award from a FINRA Dispute Resolution Services panel this week in a case that centered on damaging and maligning the advisor’s reputation, according to the award. 

Brooke Pilant worked at Ameriprise from 2017 to 2024 and, when she raised concerns about Ameriprise and then left the firm to start working at Cambridge Investment Research Inc., ran into trouble with her old firm, according to the claims listed on the award.

Pilant’s complaint against Ameriprise related to her “allegation that after raising concerns about unethical practices within Ameriprise, Ameriprise turned against her, attempting to undermine her credibility, while jeopardizing her career,” according to the award, which was released Wednesday.

Based in suburban Memphis, Pilant also claimed that her work and termination history, known as a Form U5 in the industry, was “defamatory,” according to the award. In her lawsuit, she also alleged that Ameriprise had engaged in intentional misrepresentation, tortious interference and a breach of a settlement agreement.

Ameriprise’s attorneys denied those allegations, according to the award.

The three-person arbitration panel awarded Pilant $120,000 in damages and $80,000 for “emotional distress,” according to the award. They also ordered Ameriprise to clean up or expunge Pilant’s Form U5.

Ameriprise was “callous and calculated” when Pilant left the firm, her attorney Benjamin Coulter said in an interview. “The finding of emotional distress was related to that.”

“I was pleased personally that the FINRA panel found that the language used  in the U5 was defamatory,” he added.

“This arbitration claim was brought by an employee of an independent financial advisor,” an Ameriprise spokesperson wrote in an email. “We are disappointed by the panel's decision and disagree with certain aspects of its findings.”

“Ameriprise remains committed to fostering a culture of integrity, professionalism and respect,” according to the spokesperson. “We also take our regulatory reporting responsibilities seriously.”  

Industry executives and advisors have said for decades that, behind the scenes, large brokerage firms like Ameriprise at times play fast and loose with industry norms and rules in order to make an advisor who leaves look bad.

“It sounds like they went after her,” said Sander Ressler, managing director of Essential Edge Compliance Outsourcing Services. “Ameriprise apparently didn’t hold back.”

“An award citing emotional distress is very unusual,” Ressler said. “I’ve only seen that in one other case.”  

“Firms have an obligation to tell the truth in every disclosure, but too often they go beyond the facts,” he added. “It can be career damaging to the advisor.”

“It’s an intensely difficult situation for an advisor if they are being asked to leave a firm or when they choose to leave,” said Jodie Papike, CEO of recruiting firm Cross-Search. “The firm the advisor is leaving has all the control over the information on the advisor’s U5. And it’s both difficult and expensive to get that information changed.”

“It’s the fight for the client. The firm’s motivation for this is to hang onto the advisor’s clients,” Papike said. “If a firm can make an advisor look bad, it helps its case to keep the client.”