Broker wins defamation suit against employer

Last September former Moody Securities LLC employee Judy Christina Phinizy filed a defamation claim with FINRA against her employer. The case revolved around alleged libel and slander on the termination notice Moody Securities filed for Phinizy.

Moody Securities officers answered “Yes” to the following items on the Uniform Termination Notice for Securities Industry Registration:

• Currently is, or at termination was, the individual under internal review for fraud or wrongful taking of property, or violating investment-related statutes, regulations, rules or industry standards of conduct? • Did the individual voluntarily resign from your firm, or was the individual discharged or permitted to resign from your firm, after allegations were made that accused the individual of: o violating investment-related statutes, regulations, rules or industry standards of conduct? o fraud or the wrongful taking of property?

Phinizy claimed the defamatory acts were retaliation for a commercial dispute MGL Consulting Corporation had with one of its vendors, Intellibind Technologies, LLC, where Phinizy was a non-registered employee as of March 2009. The Moody Securities officers who filed the termination form were also officers at MGL.

FINRA decided in favour of Phinizy, awarding her $19,995 in legal fees plus $1,000 for the non-refundable FINRA filing fee. FINRA also required the termination form to be amended to provide “No” answers to the above items, and to state the reason for termination as “Service no longer required.”

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