Facts

Claimants Michael Johnston, John Arnold, and Michael Mittman filed a claim against respondent Citigroup Global Markets Inc., alleging constructive termination of employment, unfair business practices, fraudulent misrepresentation, negligent misrepresentation, breach of contract and implied covenant of good faith and fair dealing, intentional interference with prospective business advantage, withholding of wages, withholding of benefits, accounting of all sums due, and indemnification of attorney fees and expenses.

The claims arose in connection to the claimants' employment with respondent and losses that occurred by their clients due to investments in respondent's funds, MAT and Flacon Strategies. The claims also related to claimants' efforts to seek employment with another broker-dealer firm.

Citigroup counterclaimed, alleging breach of contract relating to promissory notes and forgivable loan agreements dated Dec. 19, 2001 that claimants entered into.

PLAINTIFF'S CONTENTIONS:
Claimants denied the allegations of wrongdoing.

DEFENDANT'S CONTENTIONS:
Respondent asserted that the allegations were untrue.

Damages

According to the FINRA report: Claimants sought $10 million in compensatory damages, an accounting of the method of calculating the sums due, punitive damages, pre-judgment interest, attorney fees, expert witness fees, and indemnification for attorney fees, costs and expenses. According to defense counsel: Claimants argued for $34,640,460 in compensatory damages, $928,041 in attorney fees and costs, $212,500 in Labor Code Section 203 penalties, and $94,566 for indemnification for attorney fees expended in other matters.

Result

The arbitration panel awarded claimants $94,566 for indemnification, plus interest. In addition, the panel found claimants liable to respondent, as follows: Johnston was found liable for $276,418, Mittman was found liable for $12,386, and Arnold was found liable for $20,839, plus interest.

Other Information

ARBITRATORS: Bruce A. Davidson, Robert B. Hansohn, Mark A. Levy.