3 Ex-BNY Mellon Employees Win Arbitration Award

By Jen Zimmerman
Published by The Legal Intelligencer & PA Law Weekly on July 19, 2011.

v. BNY Mellon Capital Markets

Date of Verdict: June 14.
Court and Case No.: FINRA Case No. 10-02363.
Arbitrators: Roger W. Van Deusen, Charles B. Jarrett Jr., Timothy Shay Davis.
Type of Action: FINRA – Associated Persons v. Member.
Injuries: Wrongful discharge and defamation.
Plaintiffs’ Attorney: Vicki Kuftic Horne, Pittsburgh.
Plaintiffs’ Expert: David Kaplan, accounting.
Defense Counsel: Catherine S. Ryan, Reed Smith, Pittsburgh.

On Feb. 14, 2009, BNY MCM terminated the employment of [Client 1] and [Client 2] after the company asserted that the employees had engaged in misconduct, according to the respondents’ answer to the statement of claims. [Client 3] resigned in anticipation of termination.

Vicki Kuftic Horne, the claimants’ attorney, argued that the former employees, who were FINRA member firm registered representatives, had engaged in trading activities that BNY MCM had supervised and approved.

“BNY knew of [the claimants’ actions] and permitted them to undertake the trading activities in the ARS transactions,” Horne stated. However, “when market conditions resulted in the public and regulators questioning whether or not customers’ repurchase of their own ARS was appropriate,” BNY MCM became concerned, Horne said.


A FINRA arbitration panel composed of Roger W. Van Deusen, presiding chair; Charles B. Jarrett, Jr., public arbitrator; and Timothy shay Davis, a nonpublic arbitrator, heard the case.

On June 14, the Arbitrators determined that BNY MCM was liable. The panel members wrote that they had “found no basis for any discharge for cause, no basis for an allegation of non-compliance with State and Federal Securities Laws and Regulations, and no basis for negative and/or defamatory statement[s] concerning [the claimants’] conduct while employee[s] of BNY Mellon.”

The panel awarded [Client 1], [Client 2], and [Client 3] with $697,363.18, $432,264.96, and $379,981.36, respectively. The damages total just over $1.5 million and they are to be paid by BNY MCM.