The Financial Industry Regulatory Authority has ordered a broker to pay up $1.7 million to former employer RBC Capital Markets after rejecting his request for $37.8 million in compensatory damages.
FINRA’s decision was handed down after the broker, Gilbert Anthony Kuta, first filed his claim against RBC in September 2009 with allegations including prima facie tort, common law fraud, breach of contract, tortuous business interference and defamation.
RBC, in response, filed a counterclaim requesting $1.8 million in compensatory damages plus 3.15% annual interest rate from August 2009.
In its decision, the FINRA panel dismissed Kuta’s claims with prejudice. In addition, the panel also ordered Kuta to pay RBC $1.7 million in compensatory damages plus 3.15% annual interest from February 2011 until the award is paid. Kuta also must pay $160,000 in attorney’s fees and $2,000 for the counterclaim filing fee to RBC.
“RBC gets a reduced promissory note payback and I get changes to the [Form] U5,” said Kuta, who declined to provide further comment.
The FINRA panel ordered that the termination comments made by RBC in September 2009 be expunged from Kuta’s Form U5, which is used by broker dealers to register with self regulatory organizations and jurisdictions. The panel also recommended that language be erased from Kuta’s internal review disclosure reporting.
That language, quoted in the FINRA filing, referred to “use of discretion in a client account without written authorization” from the review. That language will be replaced with “failure to properly mark a trade ticket as solicited, and accepting trading instructions from a third party prior to obtaining written authority, in violation of firm policy.” The reason for termination will remain “discharged,” the FINRA panel ruled.
More details about the case, as is customary with FINRA filings, were not disclosed.
RBC was not immediately available for comment.