An NASD arbitration panel has ordered AllianceBernstein to pay a former top salesman $3.1 million, upholding his lawsuit against the firm for having been fired for his part in the firm’s mutual fund timing scandal, The Wall Street Journal reports. Charles Schaffran said the company defamed him.
The reward includes $2.7 million for defamation and $400,000 in back pay, and is one of the largest NASD has ever granted.
Schaffran said he had raised questions about market timing by hedge fund clients to upper management, which sanctioned the activity. Schaffran also argued that he didn’t engage in the “conflicts of interest” that Alliance had charged him with since his only clients were the hedge funds, and not mutual fund shareholders.
“The arbitrators’ verdict confirms that, contrary to Alliance’s defamatory public pronouncements, I never had a conflict of interest and at all times acted in accordance with my obligations to Alliance investors,” Schaffran said.