A former Raymond James advisor who sought $3.3 million from the firm after she quit amid a probe of several annuity transactions has lost the case in FINRA arbitration.
Becky Sue Lynch accused Raymond James Financial Services of defamation, civil conspiracy, false U5 statements and other misconduct, but a FINRA panel in Baltimore dismissed all her claims last week. She filed the case in March 2016, nearly a year after her resignation, according to a copy of the decision.
Annuities represent the fifth most common product involved in client cases, while contract and promissory note cases against advisors are the most frequent intra-industry claims, FINRA statistics show. However, advisors often file defamation claims against firms, according to compliance experts.
“Defamation claims in general are very difficult to prove and to win because, at the end of the day, truth isn’t defamation,” says Alan Foxman, a senior consultant with National Compliance Services. “As long as the information is truthful or accurate, there’s really no way to get rid of it.”
FIRM PROCEDURES FOLLOWED?
A lawyer who represented Raymond James directed inquiries to the company, where a spokeswoman declined to comment Wednesday. Lynch’s attorney said he wanted to check with his client before discussing the case.
Reached at her current post at Hagerstown, Maryland-based i2 Advisors, Lynch declined to comment. She joined the firm, which had been affiliated with Wilbanks Securities until it switched to CL Wealth Management, the same month she left Raymond James, according to her SEC registration.
Raymond James said in May 2015 that it was reviewing the suitability of several liquidations of annuity contracts under her auspices, according to FINRA BrokerCheck. Lynch replied in a comment included with the U5 disclosure that her clients wanted either lower costs or enhanced living or death benefits.
“All trades were approved by my OSJ. All firm procedures were followed,” Lynch wrote. She left the firm voluntarily a few days afterward.
Nine months later, Lynch accused Raymond James of false statements and the other misconduct, the arbitration decision shows. She asked for $3 million in punitive damages, $250,000 in compensatory damages, attorney fees and other expenses. The firm denied her allegations.
As usual, the three-member arbitration board did not explain their decision dismissing her claims in their entirety. The panelists did say in granting a motion by Raymond James for a directed verdict that Lynch failed to present enough evidence to back up her claims.
Lynch still faces a client arbitration dating to her seven-year tenure with the firm, according to BrokerCheck. The son of a client alleged problems with a 1035 exchange, but she responded that he “lacks complete knowledge” of the transaction because he did not attend all of the meetings about it.
FINRA arbitrators denied two other claims against her during her 28-year career, but another previous employer of hers called IFMG Securities fired her in 2006.
Lynch had her assistant pose as a client during a service call with an insurance company, the company alleged. IFMG also accused her of not fulfilling her continuing education requirements.
She countered that she had not read the firm’s CE modules but did take the tests. The assistant had pretended to be a client to carry out a requested distribution, according to Lynch, who added that she only became aware of the assistant’s actions after the call had been placed.
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