A bank advisor who recently won a $100,000 FINRA arbitration award for being wrongfully dismissed from his job is suing his former employer for all the grief it caused him.
Marc Franco worked for SunTrust Investment Services as an advisor in in the medical and legal specialty group in Sarasota, Fla.
In a complaint filed in U.S. District Court in Florida, Franco alleges that SunTrust tainted his form U5 with what he says was a slanderous statement about the reason for his dismissal, an action that has prevented him from finding suitable employment.
The bank defamed him by falsely stating that he failed to meet bank performance standards when in fact he was one of its top performers, Franco claims in the lawsuit.
The crux of his complaint is that even though he was hired as an advisor, the bank was pressuring him to secure a significant amount of commercial loans, says his attorney, Andre Perron of Florida law firm Barnes, Walker, Goethe, Hoonhout, Perron & Shea.
The bank was asking him “to force-feed a product to prospects when in fact they may not have needed commercial loans,” Perron says.
The market environment was certainly not ideal for pitching lending products. At the time, the Sarasota market was in a real estate recession and physicians were reorganizing under the Affordable Care Act. “None of them were looking for commercial loans,” Perron says, and in fact were looking to deleverage.
SunTrust's attorney, Andrew Froman of Fisher & Phillips in Tampa, Fla., declined to comment on the case.
Franco joined SunTrust Investment Services in November 2011 and was dismissed in December 2013, according to the complaint.
Dual Employment: Kindling for Disputes
The dispute speaks to a broader industry issue that will become more prevalent as banks hire people who are dual employees of both the bank and the bank’s broker-dealer arm, a situation made possible with the repeal of the Glass-Steagall Act, says Perron. The legislation drew a line between traditional banking and investment banking activities, prohibiting them from taking place within the same institution.
Perron contends that dual employment is kindling for future disputes as "it causes conflict between what dual employees are supposed to be doing for a client on the banking side versus the investment side," he says. "These inherent conflicts are going to become more concerning as the laws may not be keeping up with protecting the consumer."
With the fall of the Glass-Steagall wall, these disputes will only grow, according to Perron, an adjunct professor of banking and financial law at Western Michigan University's Cooley Law School.
In his lawsuit against SunTrust Investment Services, Franco argues that even though selling commercial loans were outside the manual for production goals, he nevertheless secured a number of loans, several of which were in the pipeline when he was terminated. The lawsuit also says he was one of their top advisors, ranked 19 out of 52 people, at the time of his dismissal.
“Having that kind of success and success throughout his time there in production did not make him a good candidate for termination,” Perron says.
The FINRA arbitration panel agreed, ordering SunTrust Investment Services to pay him $100,000 for wrongful termination. The panel also found that the statement on his U5 regarding his failure to meet bank performance standards was defamatory and recommended that the statement be expunged.
In December 2015, less than one month after winning the FINRA arbitration award from SunTrust's brokerage unit, Franco filed a lawsuit against SunTrust Bank, seeking compensation for lost wages and damaging his reputation.
Blackballed from Industry
The lawsuit blasts SunTrust Bank for "placing slanderous statements about Franco into the business community" and blames the bank for causing the statements to be published to Franco's form U5.
As a result, Franco has not been able to find employment in the banking and financial services industry, it claims. The lawsuit notes that a job offer extended by Wells Fargo soon after Franco was terminated was later rescinded due to the information on his form U5.
Franco also lost his book of business because he was "blackballed from the industry" and no longer has the same professional value to a new employer as he did when he was dismissed in December 2013, the lawsuit contends.
"It will take years for plaintiff to rebuild his client base and that is only if another bank or firm hires him without a book of business," Perron writes in the complaint.
The bank, he says, "put this false information out there" and therefore "should contribute and reimburse him for his losses."
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