An arbitration panel of the Financial Industry Regulatory Authority has pointedly criticized LPL Financial’s termination of two individuals in 2016 for alleged supervisory failures.

The case was brought by former LPL rep Brandon Marinelli, co-founder of Northstar Wealth Partners, a large LPL office of supervisory jurisdiction, and Northstar’s then chief compliance officer, Meagan Donahue.

LPL settled the case for an undisclosed sum after a day and a half of hearings that began last month.

The three-person arbitration panel went on to grant an expungement of derogatory information on Marinelli’s and Donahue’s U-5 termination reports, and in its award included some unusually pointed language about LPL’s termination of the two reps in March 2016.

LPL publicly reported that the two were dismissed for a "lack of proper supervision" of reps under their control.

But the panel clearly disagreed.

“The record [of the case] provides reason to believe that LPL’s termination of claimants was motivated (at least in part) by a desire to impede Marinelli and his business partner from moving Northstar’s book of business elsewhere,” the panel wrote in an award released Friday by Finra.

The record of the case, including LPL’s internal documents, “are remarkable in the lack of credible evidence showing wrongdoing by Donahue,” the panel said.

Marinelli’s actions “were consistent with his obligations,” the award said, and “LPL did not appear to … examine in good faith Marinelli’s actions in regard to the events causing concern.”

Although the settlement amount is private, it was “a very substantial payment to claimants, well in excess of the reasonable likely costs of [LPL’s] defense,” the award said.

Marinelli sold his Northstar stake in 2016 and joined Raymond James Associates in West Hartford, Conn. At the time of the disputed terminations, Northstar had 40 people on staff, including advisors, and about $2 billion of client assets.

“It’s rare to get such public vindication for your clients” from an arbitration panel, said David Cosgrove, of the Cosgrove Law Group in St. Louis, who represented Marinelli and Donahue.

When Marinelli was terminated, “he was disallowed from continuing on with Northstar,” Cosgrove said. “He was basically driven out of his own company.”

Donahue could not find another compliance position, he said, “so hopefully this award will allow her to get back in” if she desires.

Spokespersons for LPL were not available to comment Tuesday.