PNC Investments was ordered to hand over $75,000 to a former adviser who alleged the firm wrongfully dismissed him and tainted his reputation, according to a recent FINRA arbitration filing.
Shawn Kost, a financial adviser with PNC in Floyds Knobs, Ind., claimed PNC falsely accused him of not having met with two clients for their annual reviews, as required by the firm, said Kost's attorney, Michele Henry of Kentucky law firm Craig Henry.
Henry argued that Kost had, in fact, met with both clients. He had spoken with one client on a regular basis throughout the year. When he marked off electronically that he had completed the annual meeting, he used information from multiple meetings rather than one single meeting to comply with the firm's policy, according to Henry.
The other client was an individual assigned to Kost one month before he was expected to do the annual review, Henry said. Because the client had been deceased for five years, it took time for Kost to find the person he needed to talk to. Once he found the person, he was told to transfer the funds to another bank.
Henry argued during the hearing that the prior adviser had checked off that the annual reviews had occurred, when clearly they had not given that the client was long dead. Yet, she noted, that adviser was not terminated.
"He had completed the work for both of those clients and checked it off appropriately in the system," Henry said.
Henry noted that Kost had more than 100 clients.
PNC's attorney, Gary Lieberman of Littler Mendelson in Boston, did not respond to an email seeking comment. Fred Solomon, a spokesman for PNC, had no comment.
Kost worked for PNC from August 2011 to November 2014, when he was discharged, according to his BrokerCheck report.
Kost went after PNC for the defamatory nature of the statement it made on his form U5. The firm reported to FINRA that he had been terminated for falsification of company documents, which significantly hindered his ability to get a new job, Henry said.
In addition to holding PNC liable for $75,000 in compensatory damages, the hearing panel recommended that the explanation that PNC provided for Kost's termination be expunged. The explanation will be changed to show that he was terminated "as an at will employee without cause."
The panel also ordered the firm to reimburse Kost $375 for the non-refundable portion of his FINRA filing feel and assessed the firm $5,625 for the hearing session fees.
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