LPL Financial Corp. has once again wound up in court over a firm it snapped up during its buying binge a few years ago.
On Monday, March 1, a group of New York brokers who worked for Independent Financial Marketing Group Inc., which was acquired by LPL in 2008, sued their old firm and LPL, alleging discrimination and harassment based on religion, national origin and race. The four brokers, who filed the suit in U.S. District Court for the Eastern District of New York in Brooklyn, are of the Greek Orthodox religion and are of Greek ancestry, ethnicity and heritage, according to the lawsuit.
At the center of the lawsuit is a series of stinging remarks allegedly made by a sales manager, Matt Baval, who worked for IFMG and is currently registered with LPL. According to the lawsuit, Baval said that he wanted to “get those Greenpoint Greeks,” referring to the brokers, who had previously worked for Greenpoint Financial Advisors.
This is the second time in recent months that LPL has been drawn into legal wrangling by one of the five broker-dealers it acquired in 2007 and 2008. In November, LPL Investment Holdings Inc., LPL Financial’s parent company, sued Pacific Life Insurance Co., from which it acquired three broker-dealers.
That suit claimed Pacific Life was in breach of contract and attempting to duck paying what could be millions of dollars in settlements and awards stemming from the actions of rogue brokers at the three firms, which Pacific Life sold to LPL in 2007 for about $100 million in cash and stock.
In the suit filed this week against LPL, brokers Tasso Koumoulis, Christos Hatzis, Dominic Milito and Peter Dafniotis are also suing Astoria Federal Savings and Loan Association. While affiliated with IFMG and LPL, each broker worked out of a different bank branch of Astoria Federal Savings.
According to the lawsuit, Baval repeatedly belittled the brokers’ ethnic Greek backgrounds. In 2006, during Greek holy week, he allegedly said to Dafniotis, “He’s not even a real Greek anyway, he’s just married to one,” referring to Milito. Baval also allegedly said that Milito was using the Greek religion as an excuse for taking time off from work.
In March 2007, Baval allegedly asked Hatzis: “Is your girlfriend Greek, because she has such a big mouth?”
According to the lawsuit, on multiple occasions Baval said, “You hairy Greeks don’t shave.”
In 2008, the four reps filed discrimination charges with the U.S. Equal Employment Opportunity Commission, which issued a notice in December giving the brokers the right to sue. Dafniotis is the only broker still employed with LPL. The other three were “unlawfully discharged” between 2007 and 2009, the suit states.
The brokers are suing for unspecified damages, including back pay and damages.
“LPL does not comment on pending litigation,” said LPL spokesman Joseph Kuo. “We emphasize that the company has longstanding practices in place that support diversity and inclusiveness in the workplace.”
Astoria Federal Savings is “probably reviewing [the lawsuit] at this time, and it’s our policy not to comment on ongoing suits or investigations,” said Peter Cunningham, a spokesman for the bank.
Baval directed questions about the suit to LPL.
Filed by Bruce Kelly of InvestmentNews, a sister publication of Workforce Management. To comment, e-mail firstname.lastname@example.org.
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