Former Charles Schwab Employee Awarded $1.8 Million by FINRA Arbitration

A FINRA Arbitration Panel has awarded a former Charles Schwab & Co. Inc. employee punitive damages for wrongful termination and defamation. Mr. Timothy Leahy was employed at the Orlando office of Schwab since 1991. In 2006, Mr. Leahy was terminated for his alleged failure to adhere to human-resources policies. Mr. Leahy successfully alleged that he was wrongly terminated from the firm and the notation on his U 5 termination notice was defamatory. The three-person panel concluded that Schwab conducted a human resource investigation that was improper and resulted in a defamatory citation on Mr. Leahy’s U5 form. FINRA awarded claimant Leahy $279,000 plus interest for his lost wages stemming from his wrongful dismissal and $1.5 million in punitive damages for Schwab’s conduct. Moreover, Schwab was ordered to change the notation on Mr. Leahy’s U5 form clearing is reputation.

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