Brokerage Firm ‘Shoots First and Asks Questions Later’


When a securities brokerage firm sues to collect the balance due under a promissory note from one of its brokers, the securities industry often views the case as close as one can get to a “slam dunk” case for the firm.  When UBS Financial Services sued former brokers James Kirwin and Joanne Meninger for amounts due on their notes, however, it backfired. Forbes contributor Bill Singer wrote about the case, and his comments can be found in his article entitled “UBS Loses Lawsuit After Former Employee Calls Firm Immoral and Unethical,” Forbes).  On page 1 of the article, there is a picture of one boxer standing over his fallen opponent with the caption: “Arbitration, like boxing, can leave the odds-on-favorite on the canvass.”

The brokers in that case not only denied they owed UBS anything on the promissory notes, but also counterclaimed for damages against UBS.  One of Mr. Kirwin’s counterclaims sought “$1,000,000.00 for reputation damage and personal suffering from the three years of constant stress for [sic] working at an allegedly immoral, unethical company.”  Mr. Kirwin also sought “$300,000.00 for introductory letters not going out” and “$720,000.00 for the sum of UBS’ alleged illegal malfeasance….”  For her part, Ms. Meninger counterclaimed for $90,000 in unpaid compensation, but apparently said nothing about UBS being immoral or unethical.

The Financial Industry Regulatory Authority (FINRA) arbitration panel that heard the case denied UBS’s claims on the notes as to both brokers, and further stated: “UBS is liable for and shall pay to Kirwin and Meninger compensatory damages in the amount of $250,000.00.”

The FINRA award did not specify how the award was to be split between the two brokers, and, as usual, did not provide any details concerning the panel’s reasons for the decision in the case.  However, while there was no finding by the arbitrators that UBS was immoral or unethical, and we have no way of knowing whether part of the award was for the claim having to do with UBS being immoral and unethical, it was not specifically denied by the arbitration panel either.

Page Perry is an Atlanta-based law firm with over 150 years of collective experience maintaining integrity in the investment markets and protecting investor rights.