A three-person Financial Industry Regulatory Authority (FINRA) arbitration panel has awarded $11 million to Mark Munizzi, a former market operations supervisor at UBS in Chicago who claimed that UBS defamed him when they terminated him in April 2018.punitive damages
What allegedly happened in this case? In February 2019, Mark Munizzi was overseeing two accounts, which declined in value when the market dropped,  according to InvestmentNews. UBS fired Mark Munizzi two months later, in April 2018, stating that he failed to heed a notification  of margin calls on the accounts. Mark Munizzi claimed he was never notified of the margin calls. UBS in turn accused him of failure to supervise, alleging that he did not take into account the risks of an uncovered options strategy. UBS also accused him of lying when questioned about the incident.
In response to his termination, Mark Munizzi sued his former employer, UBS, for defamation, as well as “violation of the Illinois Wage Payment and Collection Act and tortious interference with prospective economic advantage,” according to the FINRA arbitration award. Mark Munizzi claimed that UBS owed him severance pay and that the U5 form (also known as the Uniform Termination Notice for Securities Industry Regulation) was inaccurate and was preventing him from securing gainful employment. The U5 becomes part of a broker’s permanent Central Registration Depository (CRD) record and is accessible to members of the securities industry. For more information about FINRA’s Form U5 and how the information contained within it is used, please see our article “What is FINRA Form U5?”
After 26 arbitration sessions, the majority-public arbitration panel eventually awarded punitive damages to the Mark Munizzi, a rarity in FINRA arbitrations. FINRA ordered UBS to pay Mark Munizzi $3,149,656.00 in compensatory damages, plus interest. UBS was also ordered to pay other fees and costs. In a rare move, FINRA also ordered UBS to pay punitive damages. FINRA ordered UBS to award Mark Munizzi $7.5 million in punitive damages. A copy of the arbitration award can be viewed here.
If you have any questions about punitive damages or the FINRA arbitration process, call the securities attorney of Fitapelli Kurta at (877) 238-4175 or email info@fkesq.com.