RBC will pay nearly $9.7 million after FINRA arbitrators ruled in favor of a Minnesota-based adviser who claimed the firm discriminated against her based on age and gender.
Cinda Collins joined RBC Capital Markets in 1992, eventually becoming a senior vice president and financial advisor. However, she left the firm in 2019 and joined Wells Fargo Advisors a few weeks later, where she remains a managing director, according to LinkedIn.
According to the price document released earlier this week, it filed a statement of claim with FINRA in August 2020, seeking arbitration against RBC.
In her original claim, Collins accused RBC of discriminating against her in violation of federal law and that “by terminating (Collins) because she was close to retirement, (RBC) could steal much of her book of business without compensating her for him.”
As part of the arbitration, Collins asked the panel to order RBC to file a new Form U5 showing she was terminated “without cause,” award her punitive damages, and reimburse her for the costs of bringing the lawsuit. arbitration. According to the award document, RBC asked that the claims be dismissed.
In an interview with WealthManagement.comJoseph Anthony, an attorney and executive committee member with the law firm Anthony Ostlund (who also served as one of Collins' attorneys), said Collins had originally been a pediatric nurse before joining the industry and had built a book of business with a partner between $400 million and $500 million by 2016 (the partner left for UBS around that time, according to Anthony).
Collins brought in a new partner, intending to deliver her book when she planned to retire in a few years. However, she soon became concerned that her clients wouldn't click with her new partner and reconsidered her retirement plans. The pair also brought in a client associate who Anthony claimed had no experience in the field.
After the individual went on maternity leave and returned, Cinda's partner complained privately that Collins discriminated against the co-worker for taking leave. According to Anthony, the firm conducted an investigation, but the real motivation was to grab Collin's book of business after she reconsidered her original plan to withdraw.
“They decide to fire him and there is some evidence that they made that decision before they interviewed him,” he said. “They made an educated guess and took a gamble that they could get away with it.”
The arbitrators agreed with Collins' claims of age and gender discrimination. They asked RBC to pay approximately $6 million in compensatory damages, an additional $2 million in punitive damages, and approximately $1.41 million in attorneys' fees (in addition to certain other costs). The total for RBC came to $9,650,367.56.
However, the arbitrators did not require RBC to submit a new Form U5. As of press time, RBC had not responded to a request for comment. The firm could appeal the decision, at which point it would enter the legal system in district court.
However, Anthony noted that several RBC executives (including RBC US Wealth Management CEO Michael Townsend) testified during the proceedings, which was not always positive for the firm.
“So there is a high risk in appealing this because everything that those three executives testified would then be put in the public forum and available for anyone to read,” he said. “And it wouldn't be very flattering.”