Matter of Kaufman v. Kaufman Bros., LP, 33 Misc. 3d 1046; 935 N.Y.S.2d 447; 2011 N.Y. Misc. LEXIS 5215; 2011 NY Slip Op 21383 (1st Dept., 2011)
Petitioner’s employment with Kaufman Brothers LP (“KBRO”) was terminated for allegedly interfering with the hiring of a new employee. After his termination, Petitioner alleged that KBRO and the other Respondents engaged in malicious conduct by threatening to report his alleged criminal activities, fraudulently inducing him to default on a loan from his 401K, threatening to interfere with his new employment and by placing false information on his permanent record.
Thereafter, Petitioner filed a claim with the Financial Industry Regulatory Authority (“FINRA”). In subsequent amended filings, he asserted two claims. Petitioner’s first claim was for defamation relating to alleged false information in the U5 termination notice and the second claim was for extreme emotional distress. Respondents filed their answer denying the allegations as contained in Petitioner’s statement of claim, with counterclaims.
A FINRA panel of arbitrators considered the matter and ruled that the Respondents were jointly and severally liable for and shall pay to Petitioner compensatory damages in the amount of $182,500.00. The panel also recommended the expungement of and the addition of certain information in the Petitioner’s form U5 and the deletion of the criminal disclosure reporting page. Finally, the Petitioner was found liable to KBRO for compensatory damages in the amount of $15,000.00. All remaining claims for relief were denied.
Petitioner moved to confirm the award and the Respondents opposed the petition and cross-moved to vacate the award and modify the award against the Petitioner. The Court found that the Petitioner did not make a wrongful termination claim and that his claims were for defamation and intentional infliction of emotional distress. The claim for defamation was dismissed even though the body of the award referred to the defamatory language in the form U5. The panel of arbitrators made an award of $182,500.00 without explaining on which claim and also made an award of $15,000.00 on the counterclaim without the benefit of explanation. The Court concluded that the arbitrators failed to address and dispose of the issues raised by the parties and did not make specific findings of fact and credibility. The petition to confirm the arbitrator’s award was denied and the cross-motion to vacate the award was granted. The Court ordered that the matter be remanded to the arbitration panel for clarification.
Should you have any questions relating to FINRA, arbitration or employment issues generally, please feel free to contact Russell J. Sweeting, Esq. in the firm’s Westport, Connecticut office in Fairfield County by telephone at (203) 221-3100 or by e-mail at firstname.lastname@example.org.
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