On June 10, 2014, a FINRA arbitration panel rendered a decision in a case in which Wells Fargo Advisors, LLC (“Wells Fargo”) brought a claim against Philip Anthony Duamarell (“Duamarell”), one of its former brokers, for breach of four promissory notes dated November 30, 2007, December 1, 2008, February 1, 2009 and September 1, 2009. (See FINRA Arbitration Case No. 10-04257). Duamarell denied the allegations in the Statement of Claim filed by Wells Fargo and he asserted various counterclaims against Wells Fargo, including, but not limited to, inequitable misconduct, constructive termination, and breach of the written employment contract. Duamarell claimed that during the recruitment process, Wells Fargo oversold its ability to service corporate stock plans. He further claimed that he left Wells Fargo when it became clear that Wells Fargo was unable to do business with clients in the same way as his former employer, Smith Barney. In one of the largest promissory note decisions this year, the FINRA arbitration panel found that Duamarell was liable for the principal balance due on all four promissory notes, totaling $1,282,024.77, and denied his counterclaims in their entirety. The arbitration panel did not hold Duamarell liable for Wells Fargo’s legal fees and interest.
According to the Securities Arbitration Commentator, most brokers do not prevail in promissory note cases. The Securities Arbitration Commentator estimates that firms win some portion of their claims in approximately 90% of promissory note cases.
Some promissory note cases end in settlement, and Lax & Neville LLP has been sucessful in negotiating settlements of numerous promissory note cases. Lax & Neville has extensive experience in successfully representing financial advisors in employment dispute matters. Additionally, Lax & Neville LLP has nationally represented small broker-dealers, financial services professionals and securities industry companies in regulatory matters and securities-related and commercial litigation. Please contact our team of attorneys for a consultation at (212) 696-1999.