An insurance broker won $3.25 million from its former employer, Questar Capital Corp., after a financial arbitration panel found the firm guilty of defamation and breach of contract.
Thomas J. Gorter alleged that Questar made defamatory statements about him to his clients and made false reports to regulators regarding his employment, according to documents from the Financial Industry Regulatory Authority (FINRA) arbitration panel.
Questar, based in Minneapolis, Minn., is an independent broker-dealer subsidiary of Allianz Life Insurance Co. of North America, which is a unit of German insurer Allianz SE.
In 2007, regulators learned during a routine branch examination by Kentucky’s securities division that Gorter, who held two types of state securities licenses, did not have the third one he needed to promote himself as an investment adviser representative. Gorter said in his claim that he relied on the company for compliance advice and thought he was properly licensed, according to Reuters.
Questar told Gorter his clients had to be transferred to a registered representative of an affiliated company. In the transfer, Questar found fault with changes Gorter made to client documents that he says were authorized by those clients, Reuters reported.
Gorter then submitted a letter of resignation, but the following day Questar terminated him “for cause,” the claim said. The claim also alleges that Questar reported that Gorter was terminated, not that he resigned, and that Gorter “forged documents” without client authority. Questar allegedly contacted Gorter’s customers and told them he was fired for forging documents, was “never going to be in the business again” and was going to “lose his license,” according to Reuters.
The FINRA panel found Questar liable and ordered it to pay Gorter $3.25 million in compensatory damages and $49,000 in costs, Reuters reported. The panel did not include a reason for its decision.
“We strongly disagree with the FINRA arbitration award,” said Sara Thurin Rollin, spokeswoman for Questar Captial, in a statement. “Questar does not believe the ruling is supported by the facts of this case or the law.”
Questar is evaluating its options to seek to have the arbitration award set aside, Rollin said.
Brokerage firm pays $3.3M for bad-mouthing insurance broker via IFAwebnews.com .
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