A former top LPL Financial OSJ owner is seeking to vacate an arbitration award he lost against the firm.
James Bashaw last Thursday filed a court action to throw out the award, in which he got nothing other than a $25,000 sanction against LPL for discovery violations.
Bashaw had asked for between $16 million and $24 million in damages claiming that after he repeatedly complained about lax compliance, the firm terminated him, stole his book and defamed him.
“The award was procured by undue means,” Bashaw said in a Houston federal court filing last week asking for a new arbitration hearing. “Specifically, [LPL] was sanctioned $25,000 [by the arbitration panel] for material and repeated discovery violations, and was yet still rewarded for these violations with a victory.”
The October arbitration award said that LPL “did not show good cause for failing to produce documents as ordered.”
Bashaw also claims in his court action that the panel refused to issue subpoenas for key witnesses.
In numerous motions to compel documents during the arbitration, Bashaw claimed LPL turned over few records relating to his sudden termination on Sept. 24, 2014.
According to his arbitration claim, which was filed in federal court as part of his appeal, Bashaw says that on the day he was fired, three LPL auditors showed up unannounced at his Houston, Tex. office, knowing he was out of state, and subjecting his assistant to a "hostile, two-hour interrogation” about private securities transactions he says never took place.
The examiners did not wait for Bashaw to return, and he and his assistant were then fired without explanation and without an opportunity to present their side of the story, Bashaw alleged in his arbitration claim.
About a week later, Bashaw says LPL sent a letter to his clients and his advisors saying he was under review for selling investments not approved by LPL. The letter invited clients to call and complain, Bashaw claims, while LPL offered his reps a transition package to stay on. He lost all of his advisors, six support staff and $700 million in assets, leaving him with just $50 million, his claim says.