NASD to Sawtelle: You Still Get $25M
An arbitration panel has done what it was asked: to reconsider the
$25 million in damages awarded to former Waddell & Reed broker
Stephen Sawtelle. Their decision? Sawtelle should still get the money,
according to a decision reached Sept. 4.
Previously, the Appellate Court of New York had upheld the compensatory
damages and attorneys fees of the original $27 million award, but those
pieces only came to about $2 million. But the court, in an April
decision, asked the NASD arbitrators to reconsider the $25 million
award for punitive damages, and for a time, it appeared that the
award—the largest ever given to a broker who had sued his former
firm—would be reduced to a substantially smaller figure.
In its statement, though, the arbitration panel found that Sawtelle
should get the $25 million based on "reprehensible conduct" by Waddell
& Reed, saying they "conducted a horrible campaign of deception,
defamation and persecution." Sawtelle had sued Waddell & Reed after
what he felt was an unjust termination in 1997—and Waddell
subsequently rerouted client letters and phone calls, told clients that
Sawtelle was untrustworthy, and had left the business and may have been
involved in criminal activities.
Sawtelle was first awarded $27 million in August of 2001, but Waddell
appealed the decision. The drawn-out nature of this process means that
Sawtelle’s attorney, Jeffrey Liddle of Liddle & Robinson in
New York, isn’t satisfied just yet. "I’ll answer
‘yes’ to that question when we get the money," he said in
an interview.
The award has to be confirmed, and Waddell has already said that they
will continue to try to appeal the decision, although Liddle believes
the Appellate Court doesn’t have much choice other than to
confirm the decision this time around. A spokesman for Waddell &
Reed was not immediately available for comment.
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