A FINRA arbitration panel has awarded former Touchstone Securities executive Steven Seid nearly $1.2 million in damages, including punitive damages, for wrongful termination and tortious interference. The June 3, 2026, decision also ordered the complete expungement of defamatory termination disclosures from Seid's regulatory record, marking a complete vindication for the veteran financial professional.
The three-arbitrator panel awarded Seid $838,216 in compensatory damages for wrongful termination and tortious interference resulting in the loss of deferred compensation, $256,000 in lost compensation associated with a job offer from T. Rowe Price, $100,000 in punitive damages, and reimbursement of FINRA filing fees. The panel also denied all counterclaims asserted by Touchstone Securities.
According to the award, the majority found that Touchstone failed to conduct an adequate investigation before terminating Seid in December 2024 and did not demonstrate that he engaged in alleged wrongdoing. The panel concluded that Touchstone's actions were carried out with 'deliberately malicious intent.' The panel recommended changing the reason for termination on Seid's Form U5 to 'Voluntary' and ordered the removal of all references to the underlying disclosure events from his Central Registration Depository (CRD) record.
Seid, who devoted approximately 15 years to Touchstone and its affiliates, rising from management trainee to senior executive, was terminated just days before his planned departure after receiving an offer from another firm. Touchstone had initially sought to retain him but later accused him of misappropriating trade secrets—allegations the panel determined were false and defamatory.
Laurence M. Landsman, partner at Landsman Saldinger Carroll, PLLC, who represented Seid, stated: 'The FINRA panel's decision represents a complete vindication of Steven Seid. After a full evidentiary hearing, the panel rejected Touchstone's allegations, dismissed every counterclaim, awarded substantial damages, assessed punitive damages for deliberate malicious intent, and ordered the removal of the defamatory disclosures that had threatened Steven's reputation and career.'
Landsman emphasized the broader implications: 'The securities industry depends upon accurate regulatory disclosures. When a firm publishes false or misleading termination allegations, the consequences for a financial professional can be devastating. We are pleased that the panel carefully examined the evidence and reached the right result.'
The case, Steven Seid v. Touchstone Securities, Inc., FINRA Arbitration No. 25-00364, underscores the importance of thorough investigations and accurate reporting in the securities industry. The award serves as a cautionary tale for firms that may act on unsubstantiated allegations, potentially harming employees' careers and reputations.
For HR vendors, this case highlights the critical need for robust investigation procedures before terminating employees, especially those with access to sensitive information. Inaccurate or defamatory disclosures on regulatory forms like the Form U5 can lead to significant liability, including punitive damages. Vendors providing HR technology or services to financial firms should emphasize compliance tools that ensure proper documentation and investigation protocols. The decision reinforces that firms must balance protecting trade secrets with the legal obligations to conduct fair investigations and report accurately, or face severe financial and reputational consequences.
