First they fired him; now Robert W. Baird will pay their former advisor $170,000 for defamation.

The damages were awarded to long-time Baird employee Dennis E. Michels earlier this month by a FINRA arbitration panel for defamation.

According to FINRA documents, Baird terminated Michels in February 2012 for failing to disclose outside business activities and to adhere to policies regarding the receipt and handling of a client’s savings bonds. Michels worked at Baird in its Orlando, Florida-office from January 2001 to February 2012. At the time of his termination, he was responsible for annual gross production of $650,000, according to his attorney, Philip J. Snyderburn.

Michels rejects Baird’s allegations and blames personal disagreements with Baird’s upper management for his dismissal.

“It just came down to the fact that I didn’t get along with upper management,” he says.  “I never thought it rose to the level where they were so upset that they would fire me.”

Baird decline to comment on the matter.

For his part, Michels says that his outside business interests consisted of volunteer work with non-profits, including sitting on the boards of directors for his local rotary club and an inner-city church. The work, he says, was unpaid and long known to Baird through his firm-approved resume and website.

But when Baird changed certain compliance-related documentation to include non-profits, Michels admits he failed to make note of his activities.

Baird’s managers “seem to have made a mountain out of a mole hill,” says Snyderburn, his attorney.

Michels also rebuts allegations that he improperly handled a client’s savings bonds. The client, with whom the advisor had done business for more than a decade, asked Michels to determine the value of the bonds. Upon Michels’s instructions, a sales associate gave the bonds to an intern to copy and then mail back to the client. The intern, however, forgot to mail them.

It was an honest mistake, Michels says, and the client was forgiving. Snyderburn says that during the arbitration hearing the client “testified that he thought Dennis has done a great job as his broker over the past ten years and wants him to stay his broker.” He added that one of Michels’s supervisors at Baird also testified on his behalf.

Michels claims the real reason for his termination was his sharp critique of Baird’s management and compliance practices that resulted in lost paperwork and needless delays in carrying out clients’ wishes. He admits to being outspoken and to openly calling for certain individuals to be removed for what he perceives to be their incompetence.

Snyderburn adds, “I think what it really came down to is that the senior management was very unhappy with Dennis, from a management standpoint, and rather than simply part ways and allow him to resign and take his book with him, they chose to go this way.”

At the time of his firing, Michels says, Baird offered no explanation for his dismissal and then waited 19 days before filing the reasons for the termination with FINRA.

“My book of business was destroyed overnight,” Michels says. “A lot of clients came with me, but many had doubt in their mind because they were thinking ‘Why was he fired? Why can’t he tell me?’”

Though Michels was able to move to another, smaller wealth management firm, Moors & Cabot of Boston, Snyderburn says the approach Baird took to his dismissal alienated certain clients and made it difficult for Michels to rebuild his business.

“You don’t just generate a book of business overnight,” Snyderburn says.

The arbitration panel recommended that the FINRA termination form filed by Baird be expunged from Michels’s record and replaced by the explanation “termination of employee-at-will due to policy difference.”

Michels is relieved by the panel’s decision, but remains worried that it will take time for his reputation to recover.

“I’m reaching out to clients to let them know that my case has been cleared and that I was wronged,” Michels says, “but a lot of the damage has already been done.”

 

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