Former general counsel will receive $850K for alleged defamation by his onetime employer
A former general counsel will receive $850,000 as a result of a lawsuit that contended his former company defamed him in a statement that wrongly implied he was replaced as a remedial measure in a penny stock probe.
Jurors in Hennepin County, Minnesota, awarded the lawyer, Chet Taylor, $600,000 in compensatory damages, and the company agreed on Friday to pay $250,000 to resolve a pending punitive damages claim, report the Minneapolis Star Tribune and Corporate Counsel.
Taylor says he worked for the securities brokerage Feltl and Company until 2012, when he left in good standing to pursue a solo practice. He continued to represent the company for two years after that.
In 2014, Feltl agreed to pay $1 million to resolve an enforcement action by the Financial Industry Regulatory Authority alleging violations in the company’s penny stock business. The company, which didn’t admit the violations, attached a statement of corrective action to the consent order that led to Taylor’s lawsuit.
“Finally, the firm has replaced the General Counsel, Chief Compliance Officer, Head Trader and a Branch Manager from the relevant period,” the statement said. “The current Feltl employees occupying these positions will further enhance a culture of compliance at the firm.” Taylor was not named in the statement.
A Wall Street Journal article summarized the statement this way: “The firm also said it replaced its general counsel, chief compliance officer, head trader, and a branch manager to beef up compliance.”