Top Brokers Ready $60 Million Wrongful Dismissal Claim Against PRU
Imogen Rose-Smith
At least two brokers from Prudential Securities are filing an arbitration claim against the firm for wrongful dismissal and are demanding up to $60 million in damages. Robert Ostrowski and Michael Starkman were let go by the firm at the end of last year. Both have since contacted attorney James Batson with Liddle & Robinson. Ostrowski filed a claim in mid-June for wrongful termination, and Starkman is expected to file a claim as early as today. Ostrowski, who is no longer registered with the National Association of Securities Dealers, is said to be asking for roughly $30 million in damages. Starkman, who now works at RBC Dain Rauscher in Beverly Hills, Cal., is expected to demand a similar sum. Those familiar with the case contend the dismissals were without merit and motivated by the firm's desire to keep the brokers' book of business and seven-figure deferred compensation packages. At least two other brokers, whom sources declined to name, are considering filing similar claims, which would likely push the damages near the $100 million mark. Starkman and Ostrowski did not return calls. Batson could not be reached by press time. Jim Gorman, a Prudential spokesman, declined to comment.
Ostrowski and Starkman, who worked out of the Wilkes-Barre, Pa. and Beverly Hills Calif. offices, respectively, had been top brokers at the firm, said individuals familiar with the case. "They were members of the chairman's club," said a person who used to work at Pru, referring to Pru's group of top producers. The insider added that both Starkman and Ostrowski had been let go as part of a recently implemented policy at Pru of reviewing brokers' compliance records on a quarterly basis and dismissing those individuals whom they believe have excessive complaints. "They are taking people out and shooting them," he said. The two other brokers who may join the claim were also dismissed as part of this practice. Starkman had been with the firm for 41 years before his dismissal, Ostrowski for 40.
Insiders do not regard complaints against both brokers as particularly out of the ordinary and wonder why Pru waited so long after the complaints were originally filed to fire the brokers. According to their NASD files, four customers had registered complaints against Starkman, while Ostrowski had received one complaint. Ostrowski has been accused by a customer of "unclaimable and unauthorized investments resulting in total damages (composed of losses, commissions and tax liability) of $33,173.52" A resolution is pending. Of Starkman's complaints, one was withdrawn, one resulted in no action, and two were settled for $28,750 and $150,000, respectively. Starkman was not ordered to contribute anything to the $28,750 settlement, which was reached in 1998 after a client alleged that failure to comply with instructions resulted in losses to the account. In his written comments, Starkman claims "I followed the instructions to the letter given by the firm. The client understands and still maintains a sizeable account with me and we have an excellent relationship." The broker contributed $20,000 to the larger settlement, resolved in 1999. No additional commentary on that case is provided in the filing. |
