Ex-Cetera Broker Gets $3M in Damages for Wrongful Termination
In a FINRA arbitration case, the rep accused the firm of wrongfully terminating him in 2019.
A three-person panel of arbitrators in Orlando, Florida, ordered Cetera Financial division Cetera Advisors to pay $3 million in damages on Thursday to a former broker at the company who alleged Cetera wrongfully terminated him in 2019.
In a Financial Industry Regulatory Authority arbitration dispute, Gerald Fasanella also asserted: breach of contract, implied contract, and duty of good faith and fair dealing; defamation; defamation per se; tortious interference with a business relationship and contract; and violation of FINRA and other industry rules.
In his statement of claim, Fasanella requested, among other things, unspecified compensatory damages, lost earnings and benefits damages including future earnings and benefits, and punitive damages.
At the FINRA arbitration hearing, he requested damages between $1.5 million and $3.6 million, an unspecified amount in punitive damages, $10,000 in expert witness fees, and expungement of the Form U5 termination notice that Cetera filed against him in 2019.
Cetera had requested the arb panel dismiss the claim in its entirety and award it legal fees.
The arb panel decided Cetera was liable for $3 million in damages, as well as the $10,000 in expert witness fees Fasanella requested. It also ordered the firm to reimburse Fasanella $375 for the non-refundable portion of the filing fee he had paid to FINRA Dispute Resolution Services.
Additionally, the panel recommended the expungement of Cetera’s reason for termination and explanation of termination in Fasanella’s Form U5, which had said he ”was terminated after customers alleged that the advisor executed trades in their accounts without their authorization,” according to his report on FINRA’s BrokerCheck website.
The decision was posted on FINRA’s website Thursday.
Cetera declined to comment on the decision Friday.
“We are very pleased with the award with the findings in favor of our client,” Michael Hill, a managing partner at the law firm Menzer & Hill, who represented Fasanella, told ThinkAdvisor. “Given my 10-year experience as a chief compliance officer and my partner as in-house counsel for a broker-dealer, we like representing advisors in cases when they believe they were wronged by their firm,” he said.
Gary Menzer, the other managing partner at Menzer & Hill, added: “Less than two months ago we received another multimillion-dollar award against a Cetera broker-dealer where the arbitration panel agreed with us that customers are entitled to well-managed portfolio damages and shouldn’t be confined to just net out of pocket (NOP) damages, which seems to be the prevailing wish of defending broker-dealers.”
Fasanella had been with Cetera since 2014, according to BrokerCheck. He has been in the industry for 38 years but is not currently registered as a broker. He is still, however, registered as an advisor, according to BrokerCheck.
(Photo: Adobe Stock)