Lincoln Financial to Pay $2 Million in Broker Defamation Case

Lincoln Financial Advisors must pay $2 million to a broker who alleged the company fired and then defamed him, a FINRA panel ruled.

Jeffrey Concepcion, 46, a veteran broker and manager for Lincoln Financial Advisors, alleged he was terminated after arranging a business venture on behalf of the company but before closing the deal, according to a ruling Tuesday by a Financial Industry Regulatory Authority (FINRA) arbitration panel.

Concepcion managed the Lincoln Financial Advisors offices—a unit of Lincoln National Corp.—in Cleveland and Columbus, Ohio, and was also a financial adviser when he was terminated.

Never miss a story — sign up for PLANADVISER newsletters to keep up on the latest retirement plan adviser news.

Brokers seldom succeed in winning defamation cases, but those who have strong evidence can prevail, said Francis Curran, a lawyer at McCormick & O’Brien LLP in New York. Curran has no connection to the Lincoln Financial case.

Concepcion filed the case in late 2008, and asked for $4.8 million in damages at the time of his hearing in March. The arbitration panel found Lincoln Financial liable, but ordered the company to pay $2 million. As is customary, the panel did not provide a reason for its decision.

 

Just before his termination, Concepcion was negotiating deals with independent groups of financial advisers who planned to work mostly on their own but rely on Lincoln Financial for certain services, according to his lawyer, Andrew Kabat, of Haber, Polk Kabat LLP in Cleveland.

Concepcion argued that Lincoln Financial killed the deals and fired him for cause after realizing that he did not have a noncompete agreement that prevented him from potential work with other firms.

The company then informed Concepcion's office and the national management team that it fired him for cause, according to Kabat.

Lincoln Financial refused to offer Concepcion a severance package unless he signed an agreement not to compete with the company, he alleged. The company then "made and published" false information about his termination, telling his customers that he made a career change, according to the ruling. Lincoln implied that he "left the industry altogether," Concepcion alleged.

Concepcion established Stratos Wealth Partners in 2009. The wealth management firm, in Solon, Ohio, is affiliated with LPL Financial.

PenChecks Names Chief Compliance Officer

PenChecks, Inc., a provider of outsourced retirement distribution processing services, hired Mike McWherter as the firm’s chief compliance officer.

McWherter comes to PenChecks with more than 20 years of combined corporate law and Employee Retirement Income Security Act (ERISA) plan compliance experience. He will oversee all compliance issues, supervise regulatory audits and coordinate between outside corporate counsel and ERISA counsel. 

McWherter previously served as vice president and chief compliance officer at the Memphis, Tennessee-based First Mercantile Trust Company where he designed, implemented and guided company-wide compliance programs for qualified ERISA plans. 

Want the latest retirement plan adviser news and insights? Sign up for PLANADVISER newsletters.

More information about PenChecks is at http://www.penchecks.com.

«