In a unique case involving blatant misrepresentations and false promises made by Citizens Securities, a subsidiary of Citizens Financial Group, to an investment advisor during the hiring process, who faced a $220,000 demand for return of promissory note funds because he left the bank just 4 months after starting, a FINRA panel awarded the Advisor nearly 1.7 million in damages, interest and sanctions.
NEW YORK (July 19, 2017) – In a milestone FINRA arbitration award released late last week from a Pittsburgh Pa. arbitration panel on behalf of a broker/investment advisor, New York based FINRA arbitration law firm Meissner Associates has secured a nearly $1.7 million arbitration award to a former employee of Citizens Securities a subsidiary of Citizens Financial Group (NYSE: CFG). The broker advisor, Frank Aiello, age 49 of Boalsburg Pennsylvania, claimed that Citizens misled him when they recruited him from PNC bank to work for Citizens Securities. The Claim alleged that Citizens made numerous misrepresentations to him, such as (1) false promises that he could continue to work in State College Pennsylvania where his client base was but instead assigning him to branches far from that location; and (2) false promises that he would be given a 30 million dollar book of business to add to his already growing book, when in fact he was given only one-third of what was promised.
Commenting on the award Stuart Meissner, Managing Member of the Meissner law firm, and a former securities regulator and prosecutor in New York, stated “I am pleased that the Panel heard the mountain of evidence we developed, some of which were Citizens' own witnesses, to support Mr. Aiello’s allegations even though all the promises made to him were oral.” Noting on the attempt to cover up their actions Meissner noted “Citizens Securities went out of its way, both during the events and during the arbitration process, to try to cover up and obstruct the truth from coming out, but they failed miserably.”
Mr. Aiello commenting on the award stated “I am very pleased that justice was done and that the FINRA panel saw through Citizen’s Securities attempt to mislead. I hope this award will give other employees who are misled during recruitment in the securities industry the incentive to fight for justice.”
It was alleged that after he started his employment Citizens Securities demanded that Mr. Aiello execute an acknowledgement form stating that no promises were made to him and that he was instructed to backdate the document to a date prior to his start date to make it appear that he had signed such acknowledgement while he was still with his prior employer PNC. During the hearing it was established that Mr. Aiello could not even have had the acknowledgement form on the date that it was indicated it was signed. The arbitration was also impacted by numerous sanction motions related to Citizen’s improper withholding and improper redacting of portions of critical emails and other documents which were uncovered due to subpoena, including internal emails between the headhunter and Citizens’ personnel referring to another recruit who was demanding similar promises be placed in writing in his offer letter, refusing to place such promises in writing stating “that could create a disaster from a litigation stand point. Can you imagine Frank Aiello with this kind of written promise.” At the conclusion of the hearing Aiello requested a range of compensatory damages between $902,000 and 4 million dollars. The 1.7 million dollar award, included retroactive 6% interest from his start date of August 3, 2015 on the 1.5 million dollars awarded totaling $168,410 in interest and $8,000 in sanctions. While the award was offset by the $220,000 provided to him by Citizens, along with $7,030 in interest on such note, that amount is dwarfed by the damages awarded to Mr. Aiello. Further, all forum fees totaling over $15,000 was assessed entirely against Citizens Securities.
Typically, cases involving forgivable promissory notes are very difficult to defend against, let alone achieve an award turning the tables on the brokerage firm and requiring it to pay substantial damages to the broker/advisor. It was alleged in the claim that Citizens Securities has a pattern and practice of making such false promises to prospective recruits and then failing to live up to such promises significantly impacting their careers. As a result of the award, the Meissner firm now expects, and has already received, numerous inquiries by current and former Citizens’ Securities broker/advisors who wish to bring similar multi-million dollar claims against the brokerage.
THERE IS A FOLLOWUP BLOG POST REGARDING THIS CASE
Mr. Meissner is a former Manhattan prosecutor and member of the New York Attorney General’s office securities and financial crimes divisions.
Note: New York based Meissner Associates is a nationally recognized whistleblower, securities, investment fraud and employment law firm representing SEC whistle-blowers, securities professionals in FINRA arbitration and enforcement proceedings as well as institutional and retail investors worldwide in recovering improper investment losses and protecting the employment rights of employees in the securities industry in FINRA arbitration and AAA Arbitration. Managing member Stuart Meissner is a former Assistant District Attorney in Manhattan and Assistant New York State Attorney General in the Investor Protection and Financial Crimes Units.
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Stuart D. Meissner Esq. is an experienced FINRA attorney who has practiced law for over 27 years, including as a FINRA Attorney, Securities Regulator and Prosecutor.