FINRA Arbitration Panel Finds Fidelity U5 Statements Defamed Broker
Following a lengthy arbitration conducted virtually through Zoom, a Financial Industry Regulatory Authority (FINRA) arbitration panel rendered a decision in favor of Dillon Pacholek in an action brought against Fidelity Brokerage Services, LLC (“Fidelity”). Pacholek asserted that following his voluntary resignation from Fidelity’s offices in Westlake, Texas, Fidelity falsely reported on Pacholek’s U5 that Pacholek had resigned under allegations of violation of investment-related statutes, regulations, rules or industry standards of conduct. Pacholek had since been denied multiple opportunities with other broker/dealers each of whom referenced the U5 comments for non-hire, resulting in the expiration of his securities licenses pending arbitration.
At the conclusion of arbitration, the FINRA panel unanimously agreed that Fidelity’s statements placed on Pacholek’s U5 were false and defamatory, and assessed monetary damages against Fidelity. The panel additionally ordered the complete expungement of all defamatory statements from Pacholek’s U5.
Pacholek was represented at arbitration by attorneys Cody Towns and Jeremy Kustoff of Towns Law Firm, PC in Dallas, Texas.