Fired and fined for honest mistakes?

Fired and fined for honest mistakes?

Fired and fined for honest mistakes?

A new ruling suggests your firm may be increasingly successful in recouping losses due to plain-old advisor error – liability that doesn’t end by getting fired.

The Ontario Superior Court of Justice sided with Gary Bean Securities Ltd. in rejecting the appeal of a lower court decision denying  Maurizio Agostino any compensation for wrongful dismissal.

Indeed, the court ruled the firm had every right to fire the Ontario advisor and to recoup more than $63K in losses and damages for "an unacceptable number of errors” in addition to client complaints and underperforming accounts.

“On several occasions errors were reported by clients after receiving confirmation of a trade from Bean Securities,” writes Judge Duncan Grace in the decision, issued July 9. “Mr. Agostino had not caught the error at all. Mr. Bean testified that Mr. Agostino did not seem to be paying much attention to his book of business.”

The decision is likely to raise the eyebrows of many advisors concerned even honest errors – built up and logged over time – could ultimately prove actionable post-termination.

Still, it’s worth noting that the court also accepted the firm’s argument that a lack of honesty on the part of Agostino also played a contributing role in his departure.

"Trust is the foundation for the investment adviser's relationships,” reads the decision. “In this case, it was shaken to the core."