Arbitrators Clean Record of Jones Broker Fired for Licensing Slip
A broker fired by Edward Jones after 12 years for giving retirement account advice when the Department of Labor’s now-vacated fiduciary rule was in effect has been vindicated by an arbitration panel.
The Enumclaw, Wash.-based advisor filed a defamation, wrongful termination and negligence claim against Jones in 2018. It sought expungement of the alleged defamatory reasons for her termination, along with compensatory and punitive damages, according to a dispute resolution award document accepted this week by the Financial Industry Regulatory Authority.
Lunker dismissed her monetary claims in October, and a three-person arbitration panel in Seattle ruled that the reason for termination on the U5 form Jones filed with regulators should be changed to “Other” because of the defamatory nature of the dismissal language.
“Financial advisor interpreted a rule related to licensing requirements differently than the firm did,” the arbitrators wrote. “The issue arose during a transitional phase-in period for the rule. The rule was never enforced and was ultimately vacated.”
Lunker, who is now an independent broker with Cabot Lodge Securities, according to her BrokerCheck record, did not immediately return a request for comment.
The circumstances of her departure coincide with the Department of Labor Fiduciary Rule that went into effect in 2016 under the Obama administration and vacated by a federal court in 2017 with the support of the Trump administration.
Many brokerage firms temporarily prohibited commission-based transactions in retirement accounts in preparation for the rule, requiring brokers to provide retirement advice only through fee-based advisory accounts that the DOL had considered less prone to conflicts of interest.
Joshua Kons, a Connecticut-based lawyer who represented Lunker, declined to comment on details of the case, including whether his client and Jones reached a monetary settlement.
Jones and Lunker agreed on a stipulation of facts related to the proposed arbitration award, and the firm took no position on the expungement request, according to the award document.