In a significant ruling, a FINRA arbitration panel has awarded former Touchstone Securities executive Steven Seid nearly $1.2 million in damages after finding that the firm wrongfully terminated him with 'deliberately malicious intent.' The award, issued on June 3, 2026, includes $838,216 in compensatory damages for wrongful termination and tortious interference, $256,000 in lost compensation from a job opportunity with T. Rowe Price, $100,000 in punitive damages, and reimbursement of FINRA filing fees. The panel also denied all counterclaims asserted by Touchstone Securities and recommended the complete expungement of defamatory termination disclosures from Mr. Seid's Form U5 and CRD record.
The case underscores the importance of accurate regulatory disclosures in the securities industry, where false or misleading termination allegations can devastate a financial professional's reputation and career. Laurence M. Landsman of Landsman Saldinger Carroll, PLLC, who represented Mr. Seid, stated, 'The securities industry depends upon accurate regulatory disclosures. When a firm publishes false or misleading termination allegations, the consequences for a financial professional can be devastating. We are pleased that the panel carefully examined the evidence and reached the right result.'
Mr. Seid, who devoted approximately fifteen years to Touchstone and its affiliated organizations, rose from management trainee to senior executive. According to the award, Touchstone initially sought to retain Mr. Seid after he received an offer from another firm but ultimately terminated him just days before his planned departure based on allegations that he misappropriated trade secret information. The panel determined that Touchstone failed to conduct an adequate investigation before terminating Mr. Seid and found that the firm had not demonstrated that he engaged in the alleged wrongdoing. The majority concluded that Touchstone's actions were carried out with 'deliberately malicious intent.'
The panel also recommended that the reason for termination be changed to 'Voluntary' and directed the removal of all references to the underlying disclosure events from his CRD record. This expungement is critical for Mr. Seid's ability to continue his career in the securities industry, as the defamatory disclosures had threatened his reputation and future employment prospects.
The FINRA arbitration, captioned Steven Seid v. Touchstone Securities, Inc., FINRA Arbitration No. 25-00364, highlights the accountability of firms in their handling of employee terminations and the importance of thorough investigations before making allegations that can harm a professional's career. This case serves as a reminder to the industry that false or malicious termination disclosures can lead to significant financial penalties and reputational damage for the firms involved.
