Lincoln Financial must pay $2 million to defamed broker

Reuters News
Posted: Apr 11, 2012 5:34 PM
Lincoln Financial must pay $2 million to defamed broker

By Suzanne Barlyn

(Reuters) - Lincoln Financial Advisors Corp must pay $2 million to a broker who alleged the company fired and then defamed him, a securities arbitration panel ruled.

Jeffrey Concepcion, 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 he sealed the deal, according to a ruling by a Financial Industry Regulatory Authority arbitration panel ruling dated Tuesday.

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

Brokers rarely 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 is not connected 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 to prevent him from potentially working for other firms.

The company then told everyone in his office and the national management team that it fired Concepcion 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 Concepcion "left the industry altogether," Concepcion alleged.

A Lincoln National Corp spokesman declined to comment on Wednesday.

Concepcion established Stratos Wealth Partners in 2009. The wealth management firm, based in Solon, Ohio, is affiliated with LPL Financial LLC. "I'm grateful to have closure on this chapter and have a clean slate to move forward with my new enterprise," he said.

(Reporting By Suzanne Barlyn in New York; Editing by Bernard Orr and Matthew Lewis)