A former SunTrust Robinson Humphrey broker has won $4 million in a defamation claim against the firm.
The award includes $2.5 million in punitive damages for the representative, Lance Beck, who claimed that the firm defamed him on his U-5 termination report.
A Financial Industry Regulatory Authority Inc. panel issued the ruling Dec. 28.
Such large punitive awards are unusual in arbitrations.
In a written ruling, the three- person arbitration panel said that the firm “had specific intent to cause harm” to Mr. Beck, an institutional salesman, in blaming him for a client complaint that arose from a $2.9 million investment in an illiquid auction-rate security.
The firm reversed the trade and paid back the client in March 2008, and then fired Mr. Beck a month later.
In addition to the punitive award, the panel gave him $1.2 million in compensatory damages and $419,000 in attorneys' fees. It also recommended expungement of Mr. Beck's regulatory record.
In the decision, the panel said that he was told that the firm would support its ARS product. Other SunTrust Robinson Humphrey brokers whose clients complained about auction-rate securities weren't fired.
Mr. Beck's attorney, Curtis Carlson of Carlson Lewittes PA, wasn't available for comment. A spokes-man for SunTrust Robinson Humphrey didn't return a call seeking comment.
SunTrust Robinson Humphrey is the investment-banking business of SunTrust Banks Inc.
Mr. Beck has been working for Invesco AIM Distributors Inc. as a senior director of institutional sales since September 2008.
E-mail Dan Jamieson at djamieson@investmentnews.com.
