What happens when the media re-states
bluntly what you tried to say cleverly? A jury might find you liable
for defamation, even if your statement was made in a legal document.
This observation is one of many
take-aways from the litigation victory achieved by Minnesota attorney
Chet Taylor. A jury awarded Chet $600,000 for a defamatory statement
his former broker-dealer made in a corrective action plan attached to
a FINRA consent order. The defendant added another $250,000 after
the initial verdict to end the case.
Would a broker-dealer really throw
former employees, including its General Counsel, under the proverbial
bus? Perhaps. In this instance, broker-dealer Feltl and Company
implied in the corrective action plan with FINRA that the
“replacement” of certain employees, including its General
Counsel, would “enhance a culture of compliance at the firm.”
The Wall Street Journal subsequently published an article about Feltl
utilizing a direct summary of the rather ham-handed plan: “The firm
also said it replaced its general counsel...to beef up compliance.”
The jury obviously did not care that Chet was not identified by name
in the corrective action plan or Journal article. But they certainly
cared that Chet had voluntarily departed for private practice about 2
years before the execution of the Consent Order and plan. Food
for thought.
David Cosgrove has obtained monetary
awards and expungements for various members of the financial industry
from broker-dealers such as U.S. Bancorp Investments, Raymond James
Financial Advisers, and Questar. He has also achieved negotiated
confidential resolutions on behalf of other advisers and employees.
