FINRA Throws A Curveball In Morgan Keegan Case
Morgan Keegan is back in the news - this time over an arbitration case with a former employee. On June 30, the Wall Street Journal reported that a Financial Industry Regulatory Authority (FINRA) arbitration panel ordered a former Morgan Keegan broker to pay back some of his signing bonus to Morgan Keegan. In an unusual move, however, FINRA also demanded that Morgan Keegan compensate the broker.
According to the article, Paul Kotos was ordered to pay Morgan Keegan about $350,000, plus the firm’s attorney’s fees, from a signing bonus he received when he joined the Memphis-based brokerage two years ago. In Kotos’ counterclaim, the FINRA arbitration panel ordered Morgan Keegan to pay him $200,000.
According to Kotos, Morgan Keegan defamed him with a statement on his Central Registration Depository, or CRD, Form U5. A U5 provides information on the reasons for a broker leaving a firm.
In making the award, FINRA stated that “the procedure deployed by [Morgan Keegan] in the termination of [Kotos] fell significantly short of industry standards.”
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