The former chief operating officer of Investacorp Inc., which is now a subsidiary of another firm, is seeking $5 million in compensation for work he says he did for the subsidiary and for breach of contract.

Investacorp Inc., a broker-dealer, was bought by Ladenburg Thalmann Financial Services Inc., based in Miami, Fla., in October 2007. Scott Sherwood, COO and executive vice president of Investacorp, based in Miami Lakes, Fla., claims Ladenburg improperly terminated the contract Sherwood had with Investacorp. He is now seeking compensation for work done under that contract, says Jerome Pivnik of Pivnik & Nitsche, attorney for Sherwood.

Sherwood says he was a leader in helping Ladenburg acquire Triad Advisors Inc. in a deal that was completed in August 2008. He also claims he helped recruit registered representatives for Investacorp while it was a subsidiary of Ladenburg and did other work for the subsidiary for which he deserves compensation.

Sherwood was considered to be one of the lead innovators behind the Investacorp brand for almost three decades, Pivnik says.

The arbitration claim, which was filed with FINRA, could take six months to a year to reach a conclusion.

Kerry Bloom, a spokeswoman for Ladenburg, said Sherwood's claims are "entirely baseless."