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Madigan blamed for job loss

Thursday, Jan 9, 2014

* OK, I got a little chuckle out of a recent Investment News story. Who knows, maybe there’s something to it. I really doubt it, though.

The story goes that Vincent Romano was a broker at Morgan Stanley. He decided to run against Rep. Lou Lang as a Republican back in 2012. He was fired in May and Romano asked for damages

“[Morgan Stanley] feared a loss of business with the city of Chicago and the state of Illinois because [Morgan Stanley Smith Barney] has a relationship with House Speaker Michael Madigan, and Romano was running on a reform platform that could upset Michael Madigan’s political power,” Mr. Romano argued

Upset Madigan’s political power? Hardly. Romano spent less than $29K in the final quarter and was thoroughly thumped 68-32 by Lang.

* But this comment went into Romano’s permanent record

There were “concerns about [the] financial adviser running for elected political office, despite not having received prior firm approval for same, as required by firm policy,” the firm wrote on his U5, which is publicly available through the Financial Industry Regulatory Authority Inc.’s BrokerCheck database.

Romano claimed that he was initially given permission to run.

* And he won his case, but didn’t get nearly the $8 million he’d demanded

In the end, the arbitration panel awarded $475,000 in compensatory damages and $50,000 in punitive damages.

It also ordered that the language on Mr. Romano’s termination form be altered to read that he was fired because of “concerns about the financial adviser running for elected political office, despite not having received prior firm approval for same, due to a misunderstanding between the firm and the financial adviser. The terminated employee violated no investment-related statutes, regulations or rules.”

Mr. Romano said that he would have liked the award to have been more substantial, but he applauded the panel’s decision to award punitive damages, though he characterized the amount as a “slap on the wrist.”

Morgan Stanley said that it regretted the award and denied any wrongdoing, pointing to the arbitrators’ characterization of the disagreement as a “misunderstanding.”

By the way, Romano circulated petitions to run against Lang again this year, but was removed from the ballot on Tuesday.

According to the Investment News story, Romano is “working on a business venture in firearms manufacturing,” which probably wouldn’t go over too well with Skokie-area voters anyway.

[Hat tip: IR]

- Posted by Rich Miller        


18 Comments
  1. - train111 - Thursday, Jan 9, 14 @ 12:05 pm:

    Another suit coming because he got bounced from this year’s ballot??


  2. - Formerly Known As... - Thursday, Jan 9, 14 @ 12:12 pm:

    Dude got half a million???


  3. - Just Observing - Thursday, Jan 9, 14 @ 12:17 pm:

    Agreed that he was never a threat to Madigan’s power… but it does seem that Morgan Stanley believed that him running would be a perceived threat to the powers that be.


  4. - Rich Miller - Thursday, Jan 9, 14 @ 12:23 pm:

    ===it does seem that Morgan Stanley believed that him running would be a perceived threat===

    I don’t see that at all.


  5. - Been There - Thursday, Jan 9, 14 @ 12:24 pm:

    ===Mr. Romano said that he would have liked the award to have been more substantial===
    I would gladly have my boss fire me for a half a mil.


  6. - Louis G. Atsaves - Thursday, Jan 9, 14 @ 12:25 pm:

    Since when can employer’s forbid employees from running for public office? Where is that written in the Constitution?

    There is an underlying issue here as indicated by the language of the Arbitrator correcting Romano’s personnel file. Perhaps there ought to be a law about it.


  7. - CollegeStudent - Thursday, Jan 9, 14 @ 12:29 pm:

    =Since when can employer’s forbid employees from running for public office? Where is that written in the Constitution?=

    Nowhere, but remember you are applying for a job that would likely take away from the time and effort you put into your current job. Employers are certainly known to terminate employees for doing that.


  8. - Anonymous - Thursday, Jan 9, 14 @ 12:42 pm:

    === Since when can employer’s forbid employees from running for public office? Where is that written in the Constitution? ===

    Securities Broker dealers surely can limit what other forms of employment one of their representatives can engage in. If one of Morgan Stanley’s reps wanted to work at McDonalds to make ends meet, the rep needs the firm’s permission first. The issue here seems to be that there was a disagreement of some sort between the rep and the firm as to whether permission was granted.


  9. - Anonymous - Thursday, Jan 9, 14 @ 1:24 pm:

    The investment banks are very strict about any of their employee’s being involved in politics in any way after the “pay to play” regulations went into effect about a dozen years ago. I had a friend who had to get multiple levels of clearance within Morgan Stanley just to make a campaign contribution to a school board race. He couldn’t do it until he got it in writing. Romano was pretty reckless to run without having clearance in writing. I’m surprised he got any award.


  10. - MOON - Thursday, Jan 9, 14 @ 1:28 pm:

    I suppose Madigan is also responsible for the past weeks sub-zero weather, or for the Bears loss to the Packers !


  11. - Chicago Cynic - Thursday, Jan 9, 14 @ 1:49 pm:

    I’m amazed that he won this suit and a half mil to boot. Sure seemed like the guy was just an entitled jerk who figured it’s none of his employer’s business whether he runs for public office and spends five months of the year in Springfield. Geez.


  12. - Demoralized - Thursday, Jan 9, 14 @ 1:54 pm:

    ==Since when can employer’s forbid employees from running for public office?==

    If you are paid with federal funds you can’t.


  13. - Formerly Known As... - Thursday, Jan 9, 14 @ 1:54 pm:

    === I had a friend who had to get multiple levels of clearance within Morgan Stanley just to make a campaign contribution to a school board race. ===

    Is that just a Morgan thing?

    Because it seems a lot of investment bankers raise and donate a lot of coin every cycle. And it seems inefficient and unlikely all the Goldman guys are getting pre-approval for every donation they want to make and every fundraiser they want to hold every two years or so.


  14. - walker - Thursday, Jan 9, 14 @ 1:56 pm:

    Ridiculous award. Of course they can require this, and many other things, of their professional employees. Typical foolishness by an arbitrator, on the face of it.


  15. - Siriusly - Thursday, Jan 9, 14 @ 2:09 pm:

    Louis Atsaves - I know of many employers who have a policy of requiring prior approval before someone can seek public office. If your company has any ties to government at all - it make sense for the company to have a policy like that.

    You have a constitutional right to seek elected office. It doesn’t mean that your job should be protected if you violate company employment policy.


  16. - Mr. Big Trouble - Thursday, Jan 9, 14 @ 2:36 pm:

    I have been in the financial services industry, on the compliance side for over 20 years. The top tier firms are deathly afraid of conflicts on interest, perceived or real, and so make their registered reps go thru numerous iterations of approvals for outside activities, be it investments, political contributions and outside employment. Its standard faire in the industry. Its only been in the last 5-7 years or so that firms have really started to crack down, in light of FINRA and SEC reforms of the industry. I, for example, had to resign from the fire pension review board of a local municapality because my broker/dealer would no longer approve of me in that role.


  17. - Anonymous - Thursday, Jan 9, 14 @ 3:16 pm:

    === I suppose Madigan is also responsible …the Bears loss to the Packers !===

    No, that would be Chris Conte.


  18. - wordslinger - Thursday, Jan 9, 14 @ 3:34 pm:

    –No, that would be Chris Conte.–

    My sons finally trumped me on “Godfather” trivia during that game.

    Chris Conte is the grandson of Richard Conte, the actor who played “Don Barzini.”

    Both of them were in the wrong place at the end.


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