A Finra arbitration panel has ordered USAA Financial Advisors to pay compensatory and punitive damages to two brokers the firm terminated in 2017, the industry’s self-regulator says.
Christopher Johnson and Lee Przybyla were terminated in April 2017 over allegations that they had “improperly sought compensation credit to which [they were] not entitled,” according to their BrokerCheck profiles.
Along with five other former USAA brokers, the pair filed an arbitration claim in December 2017 accusing USAA of breach of contract, tortious interference with employment agreement, wrongful discharge in violation of public policy and defamation, among other claims, Finra says in an award document.
The brokers claimed that the cause of their termination was connected “to the preparation and publishing of financial plans,” and that their termination “financially devastated” them and made it impossible for them to find employment with equivalent compensation, according to the award document.
The arbitration panel ruled that USAA must pay $500,000 in compensatory damages to Johnson and $350,000 to Przybyla, plus interest, Finra says.
In addition, USAA has to pay $350,000 in punitive damages of $350,000 to each, and $250,000 in lawyers’ fees to both, according to the award document.
In addition, the panel recommended that the comments for the termination of the brokers should be removed and the reason for the termination be changed to “voluntary,” Finra says.
Johnson and Przybyla were originally joined by former USAA brokers Michael Andrews, James Goggins, Jennifer Meyer, Jason Proctor and Alex Wilson in their claim against USAA, but the claims of the other five brokers were separated from Johnson and Przybyla’s in May 2018 following a request from USAA, according to the award document.
The remaining cases are headed into arbitration hearings later this year and in 2020, according to a press release from Shustak Reynolds & Partners, the law firm that represented Johnson and Przybyla.