After years of wrangling with one of its former top producers, money manager Waddell & Reed has agreed to pay the ex-employee $7.9 million in punitive damages, according to the Wall Street Journal.
Stephen Sawtelle claimed that the Overland Park, Kan.-based launched a smear campaign against him after he was fired in 1997.
"I have mixed emotions," Sawtelle said. "I am glad it is over, but I didn't like the process."
The process has been a long one, too. In 2001, three arbitrators from the NASD called Waddle's treatment of Sawtelle "reprehensible." In letters to clients, Waddell said Sawtelle no longer had authority to manage its accounts. Customers also received calls from telemarketers hired by the firm. The NASD panel ruled that Sawtelle should be paid $27.6 million in punitive and compensatory damages.
Prior to the most recent ruling, Waddell paid the broker $1.2 million in punitive damages and $728,000 for incurred legal fees.
"This is an issue that has been out there for several years," said Waddell CEO Hank Herrmann. "Putting it behind us is a positive development."
The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.