CINCINNATI (TDB) -- A brokerage company that claims it is among the best places to work in Ohio just got socked for mistreating a former worker. Carlos Reisen Jr. said his ex-bosses furnished false information to the Financial Industry Regulatory Authority (FINRA) on a termination notice. A federal judge agrees the form was filed with reckless disregard for the truth and has upheld a $516,000 damage award. U.S. District Judge Susan Dlott sided with an arbitration panel that said the "language . . . associated with Mr. Reisen's termination was defamatory." Reisen had been the Cincinnati branch manager for Hilliard Lyons, a Louisville brokerage that touts itself as "the best place to work in four states." The company has 70 offices in 13 states.
Hilliard Lyons' reckless conduct dates to April 23, 2008 when it reported to FINRA that Reisen had been sacked for disloyalty: "Mr. Risen (sic) was involuntarily terminated for violating his duty of loyalty to the company. As a manager, Mr. Reisen knowingly facilitated the departure of two financial consultants who were hired by a competitor while himself interviewing with the competitor. His termination was not the result of any sales practice related reasons." The statement -- which turned out to be untrue -- was filed on a Form U5/Termination Notice for Securities Industry Registration.
Reisen initially sought $1.8 million in compensatory damages and $$3.7 million in punitive damages. Hilliard Lyons contended that it had not been reckless in filing the termination notice, and said there was no defamation. It also contended the statement was privileged because it was made in the context of a judicial or quasi-judicial proceeding. Judge Dlott saw otherwise:
"Defamatory statements made with reckless disregard for the truth are not entitled to a qualified privilege under Ohio law . . . The [arbitration] Panel held that the 'language associated with Mr. Reisen's termination was defamatory' and that the 'preparation of the U% was negligent and reckless.' Even assuming that the Panel accorded qualified privilege to the Form U5 statements, that privilege was defeated as a matter of law by the factual finding that Hilliard Lyons preparation of the For U5 was reckless."
The filing was changed to say he was involuntarily terminated due to a management conflict. The disloyalty claim was expunged. The case is 1:09-cv-00535 in U.S. District Court for the Southern District of Ohio. Attorney William K. Flynn of Strauss & Troy represented Reisen.