J.P. Morgan Securities is seeking to vacate a $1.4 million award it was ordered last month to pay a former advisor who alleged that the firm's stated reasons for firing him were false and defamatory.

In a preliminary memorandum filed Monday in U.S. District Court for the Western District of Kentucky in Louisville, J.P. Morgan said the Financial Industry Regulatory Authority (Finra) arbitration panel disregarded the law and exceeded its powers when it decided in favor of advisor Dustin B. Luckett.

Citing the 30-day payment period under Finra’s guidelines and the extensive record of the arbitration, which took place over four days with 12 witnesses and more than 70 exhibits, J.P. Morgan is asking the court to grant an extension until May 4 so that it can file a supplemental memorandum in support of its motion to vacate the award.

Luckett’s attorney, Michael A. Valenti of Lousiville, said, “We do not believe there are any grounds to vacate the award. We don’t think that the arbitrators exceeded their powers or otherwise did anything wrong,” he said. “We will have to go through the process, but we do believe that the award will be upheld.”   

Luckett, who had been with J.P. Morgan from October 2012 to June 2017, sought to clear his record, alleging that the Form U5 that J.P. Morgan filed after he was fired was defamatory. It accused Luckett of “invasion of privacy/false light, tortious interference with prospective business expectancies, and breach of implied covenant of good faith and fair dealing.” Firms are required to file registration records with regulators when an adviser leaves a firm.

Luckett had sought about $5.6 million, exclusive of interest and costs, including compensatory damages of about $3.7 million, punitive damages of $500,000, and attorneys’ fees of about $1.4 million. In addition to the $1.4 million he was awarded, the panel also held J.P. Morgan liable for $17,250 in hearing costs and $600 for the non-refundable portion of the filing fee.

Additionally, the panel recommended that the termination explanation be expunged. “The reason for termination shall remain the same and the termination explanation shall be replaced with the following language: ‘Noninvestment related. After a dispute about a clerical process, RR became disillusioned with the company’s atmosphere requiring separation of his at-will employment,” the panel ruled.

Luckett’s BrokerCheck file had stated that he was fired “for having a customer sign a document and then, on the next day, asking a co-worker whether he could notarize the document without customer present; the co-worker then notarized the document [for Luckett] in violation of firm policy. In addition, after the allegations were made regarding the notarization issue, firm conclude [Luckett] engaged in conduct deemed inconsistent with its anti-retaliation policies.”

Luckett denied the firm’s characterization of the events that led to his termination and said that he believed the assertions on his Form U5 “were purposely put there in order to hamper my future employment prospects and coerce existing clients to remain with JPMC.”

He also noted that he was never trained by J.P. Morgan or anyone else on notary rules and that he “will never understand how JPMC considered my actions in these events to be with intent.”

Valenti said the “offensive” language that was written on his client's Finra record tarnished his reputation and prevented him from getting job offers. He said his client had been looking to leave the firm for a variety of reasons prior to his termination. “He had some very lucrative offers that just evaporated once he was terminated.”

Valenti said now that Luckett’s record is cleared, he is looking to get back into the industry. He said Luckett works for a bank under the auspices of the trust department, where he is involved in financial planning and advising activity for the bank’s customers.   

Luckett began his career with Merrill Lynch in 2006, according to BrokerCheck. He had short stints at three other firms, including Chase Investment Services, before moving to J.P. Morgan in 2012. After being fired from J.P. Morgan in June 2017, he joined J.J.B. Hilliard, W.L. Lyons in July 2017. He left the firm in June 2018.