Finra Panel Slams LPL over Terminations
A Finra arbitration panel has sided with a former LPL Financial rep and a chief compliance officer who were both fired by the firm in 2016 over alleged failures in their supervisory roles, FA magazine writes.
LPL settled the case for an undisclosed amount with Brandon Marinelli, co-founder of LPL OSJ Northstar Wealth Partners, and Meagan Donahue, Northstar’s then chief compliance officer, according to the publication. LPL had accused Marinelli and Donahue of failing to supervise reps under their purview, according to the publication.
The Finra panel ruled that derogatory information on Marinelli and Donahue’s U-5 termination records should be expunged and added that LPL’s termination appeared to be motivated in part by the company’s desire to hold on to Northstar’s business, FA magazine writes. In 2016, Marinelli sold his stake in Northstar, which at the time had 40 staff overseeing about $2 billion, and moved to Raymond James Associates, according to the publication. LPL spokespeople weren’t available to comment on the case to FA magazine. Meanwhile, David Cosgrove of the Cosgrove Law Group, the lawyer who represented Marinelli and Donahue, tells the publication that “it’s rare to get such public vindication for your client.”
In a separate case, another Finra arbitration panel has ruled in favor of a client of J.J.B. Hilliard, W.L. Lyons, awarding her $445,000 in compensatory damages, InvestmentNews writes.
Elizabeth Nickens had alleged in a claim filed in March 2017 that Christopher Duke Bennett, a broker with the firm since 1995, traded in her qualified and non-qualified retirement accounts without her authorization, churned trades and made allocations unsuitable for an investor her age and with her investment goals, according to the publication. Nickens also asserted breach of fiduciary duty, common law negligence, omission of facts, violation of Kentucky statutes and Finra rules and failure to supervise, InvestmentNews writes.
Nickens originally sought just $250,000 in compensatory damages but the final award was less than the $900,000 requested as final damages, which included compensatory damages as well as interest, punitive damages, costs and lawyer fees, according to the publication.