Supreme Court Rules in Favor of Former Ameriprise Advisor

Posted on April 8th, 2022 at 12:09 PM
Supreme Court Rules in Favor of Former Ameriprise Advisor

From the Desk of Jim Eccleston at Eccleston Law:
The U.S. Supreme Court has ruled in favor of a former Ameriprise Financial advisor in a landmark decision that could provide advisors with more leeway when disputing arbitration awards.


The Supreme Court determined in an eight-to-one ruling that the Louisiana advisor is permitted to ask a state court to vacate a Financial Industry Regulatory Authority (FINRA) arbitration panel ruling in favor of her former employer. The Supreme Court ruling overturned a lower appeals court ruling and subsequently remanded the case. According to the opinion, federal courts do not possess the authority to vacate arbitration awards by “looking through” the petition to uncover the jurisdictional basis of the “underlying substantive controversy.” The case has attracted attention as state courts potentially may be more favorable to advisors in overturning awards.


The advisor, Denise Badgerow, initiated her legal battle in 2016 when she filed wrongful termination complaints with FINRA and a federal court against Ameriprise as well as three Ameriprise advisors, Gregory Walters, Thomas Meyer, and Ray Trosclair. A FINRA panel of arbitrators ruled against Badgerow in December 2018 by determining that Badgerow failed to establish liability with her claims. Badgerow subsequently asked a Louisiana state court to vacate the FINRA award alleging that the three advisors had “obtained the award by fraud” during the arbitration, according to Badgerow’s Supreme Court brief. However, the three advisors removed the lawsuit to federal court, which confirmed the arbitration award and deemed her claims as “legally frivolous” and “utterly absurd”, according to their Supreme Court brief. Subsequently, the Fifth Circuit Court of Appeals in New Orleans affirmed the federal trial court’s ruling, which prompted Badgerow to appeal to the Supreme Court.


Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, regulatory and disciplinary matters.

 
 

Tags: eccleston, finra, ameriprise

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