A Financial Industry Regulatory Authority (FINRA) arbitration panel says that Goldman Sachs Group Inc. (GS) has to pay two brokers $7.6 million because they were wrongfully terminated. Luis Sampedro and Christopher Barra, who are now with UBS (UBS), claim that the Goldman made them forfeit deferred commissions after letting them go.
The two of them were a team at the financial firm until 2007. They filed their arbitration claim in 2010.
The withholding happened after the financial firm modified its compensation plan, requiring that a percentage of the brokers’ commission be retained as restricted stock units to vest. Goldman, however, fired the two men before their stock vested.
According to the brokers, the forfeiture requirement violates California state law. They also contended that the firm violated a federal law that protects military employees from retaliation and harassment in the workplace.
Barra, who was an Army Reserves lieutenant colonel and graduated from West Point, said that a firm manager chastised him and then took retaliatory action because Barra went on reserve duty in 2006 and had to be away from work. Months later, he and Sampedro were fired.
The FINRA panel found that Goldman was liable under the law and ordered the firm to pay Barra $100,000 for the violation, which is part of the $7.6 million reward. The two brokers had sought $7 million. The award ordered includes $2 million in punitive damages.
SSEK Partners Group is a securities fraud law firm.
Goldman must pay two brokers $7.6 mln for wrongful termination -panel, Reuters, December 8, 2014
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