Superior Court of Massachusetts, Suffolk, Business Litigation Session
SANTANDER BANK, N.A.
Date: June 6, 2019
MEMORANDUM OF DECISION AND ORDER ON PLAINTIFFâS
APPLICATION TO VACATE OR IN THE ALTERNATIVE MODIFY,
ARBITRATION AWARD AND ON DEFENDANTâS CROSS MOTION TO CONFIRM
Douglas H. Wilkins, Justice
Complaint in this case seeks to vacate an Arbitration Award
of the Financial Industry Regulatory Authorityâs
("FINRA") Office of Dispute Resolution dated
January 22, 2019 ("FINRA Decision") in Michael
Klein v. Santander Bank, N.A., Perry Vachon and Charles
Wermuth, Case Number 17-02674 ("Arbitration
Proceeding"). The plaintiff here is Santander Bank, N.A.
("Santander"), which was the respondent in the
Arbitration Proceeding. The defendant is Michael Klein
("Klein"), who prevailed as the claimant in the
Arbitration Proceeding. Before the court is Petitionerâs
Application to Vacate, or in the Alternative Modify,
Arbitration Award ("Motion"). Klein has filed a
"Cross-Motion to Confirm Arbitration Award"
("Cross-Motion"). After hearing, the Motion is
DENIED and the Cross Motion is ALLOWED.
written Submission Agreement, dated February 16, 2018
("Agreement"), Mr. Klein and Santander agreed:
The undersigned parties ("parties") hereby submit
the present matter in controversy, as set forth in the
attached statement of claim, answers, and all related cross
claims, counterclaims and/or third-party claims which may be
asserted, to arbitration in accordance with the FINRA
By-Laws, Rules, and Code of Arbitration Procedure.
Â¶11. The parties also agreed that their dispute would be
decided pursuant to FINRA procedures and rules:
The parties hereby state that they or their representative(s)
have read the procedures and rules of FINRA relating to
arbitration, and the parties agree to be bound by these
procedures and rules.
Statement of Claim, dated November 30, 2017 alleged six
counts against Santander: (1) violation of the public policy
exception to the Employee at will doctrine, (2) breach of the
covenant of good faith and fair dealing, (3) promissory
estoppel, (4) fraudulent misrepresentation, (5) breach of
contract, and (6) retaliation. The allegations of the
statement of claim focused upon a former Santander employee,
John Bartolo, who reported to Mr. Klein. The statement of
Claim alleges that Santander improperly terminated Mr. Klein
based on his complaints about Mr. Bartolo on various matters,
including personal safety issues and complaints related to
Mr. Bartoloâs failure to pass a FINRA securities licensing
exam. It does not allege that other supposedly unlicensed
employees at Santander sold managed products and did not make
broad allegations regarding a series of partnerships where
licensed individuals would split commissions with unlicensed
individuals. Nor did it allege that Santander circumvented
its automated exception monitoring of regulated products.
three-member FINRA arbitration panel heard evidence on
November 26-29, 2018 in Boston, Massachusetts. The presiding
chairperson was Paul Peter Nicolai. During the hearing Mr.
Nicolai called for testimony on licensing issues and
questioned Mr. Klein regarding his complaints specific to Mr.
Bartolo, as well as about broader licensing issues at
Santander Securities, LLC ("SSLLC"), which was not
a party to the arbitration proceeding. He also issued a
warning to SSLLCâs Chief Compliance to review his records on
licensing issues and later questioned that witness on
licensing issues. The Chairperson disclosed during the
hearing that he had reviewed evidence outside of the record
relating to licensing and regulatory issues. By Santanderâs
count, the Chairperson asked about 330 questions during the
hearing and occupied close to one hour of testimony.
parties submitted post-hearing briefs addressing Mr.
Bartoloâs licensing activity, not broader licensing issues
concerning other employees.
FINRA decision was entitled "Award." It also
contained a separate section entitled "AWARD,"
After considering the pleadings, the testimony and evidence
presented at the hearing, and the post-hearing submissions,
the Panel has decided in full and final resolution of the
issues submitted for determination as follows:
1. Respondent Santander is liable for and shall pay to
Claimant $1, 227, 259.99 in compensatory damages.
2. Respondent Santander is liable for and shall pay to
Claimant interest in the amount of $112.40 per day from
September 23, 2015 to December 31, 2018.
3. Respondent Santander is liable for and shall pay to
Claimant interest in the amount of $435.00 per day from
January 1, 2019 until the award is paid in full.
4. Respondent Santander is liable for and shall pay to
Claimant the sum of $77, 500.00 in attorneys fees pursuant to
Massachusetts General Law Chapter 231, section 6f [sic].
5. Respondent Santander is liable for and shall pay to
Claimant $375.00 as reimbursement of the non-refundable