In a FINRA arbitration statement of claim filed in April 2011, Morgan Stanley Smith Barney (“MSSB”) sought $68,239.00 in compensatory damages plus interest, costs, and fees from Respondent Richard Swetish, who had been an employee with the firm.
The FINRA arbitration panel denied with prejudice MSSB’s claims. Swetish had denied the allegations and filed a Counterclaim where he successfully maintained that MSSB’s behavior had significantly prevented his ability to build a book of business and retain clients. Swetish stated that MSSB failed to provide support and technology, and that this failure diminished commissions due to lack of clients.
In addition to denying MSSB’s claim on the note, the panel found Claimant MSSB liable, and was ordered to pay Respondent Swetish $15,446.00 in compensatory damages at 6% per annum interest from August 31, 2010 until the award is paid in full, and $3,000 in attorneys’ fees.
This particular case could cause an influx of similar cases against major firms. Swetish shows that registered reps can use the defense of a lack of reliable support and/or crucial technology and their subsequent effect on developing clients.
Eccleston Law Offices counsel, represent and defend financial advisers nationwide in regulatory, compliance, disciplinary and employment matters in arbitration and litigation, and before regulatory bodies such as the SEC, FINRA and state securities regulators. We frequently defend forgivable loan collection actions, prosecute Form U-5 defamation actions, counsel advisers as to how to transition successfully from firm to firm and negotiate the best possible agreements with their new firm, and provide succession planning, buy-sell agreements and other exit strategies and strategic consulting, practice transitions, mergers, acquisitions and divestitures.
