A Financial Industry Regulatory Authority (FINRA) arbitration panel has ordered Ameriprise Financial Services to pay a former advisor $200,000 after finding the firm defamed her and caused emotional distress. The award, issued Wednesday, includes $120,000 in compensatory damages and $80,000 specifically for emotional distress, a rare designation in industry disputes.
Brooke Pilant, who worked at Ameriprise from 2017 to 2024, alleged that after she raised concerns about unethical practices at the firm, Ameriprise retaliated by undermining her credibility and jeopardizing her career. She left Ameriprise to join Cambridge Investment Research Inc., but her former firm filed a Form U5—the industry's standard termination notice—that she claimed contained defamatory statements.
Pilant's complaint also accused Ameriprise of intentional misrepresentation, tortious interference with her business relationships, and breach of a settlement agreement. The three-person arbitration panel sided with her on the defamation claim, ordering Ameriprise to clean up or expunge the contested U5 entries.
“The finding of emotional distress was related to that,” said Benjamin Coulter, Pilant's attorney, referring to the firm's conduct after her departure. He described Ameriprise's actions as “callous and calculated.” Coulter added, “I was pleased personally that the FINRA panel found that the language used in the U5 was defamatory.”
An Ameriprise spokesperson expressed disappointment with the decision. “This arbitration claim was brought by an employee of an independent financial advisor,” the spokesperson wrote. “We are disappointed by the panel's decision and disagree with certain aspects of its findings. Ameriprise remains committed to fostering a culture of integrity, professionalism and respect. We also take our regulatory reporting responsibilities seriously.”
Industry observers note that disputes over Form U5 language are common but rarely result in emotional distress awards. Sander Ressler, managing director of Essential Edge Compliance Outsourcing Services, said, “An award citing emotional distress is very unusual. I’ve only seen that in one other case.” He added, “Firms have an obligation to tell the truth in every disclosure, but too often they go beyond the facts. It can be career damaging to the advisor.”
The case highlights the power imbalance advisors face when leaving a firm. Jodie Papike, CEO of recruiting firm Cross-Search, explained, “The firm the advisor is leaving has all the control over the information on the advisor’s U5. And it’s both difficult and expensive to get that information changed.”
This ruling comes amid broader scrutiny of how large broker-dealers handle advisor departures. In a related development, Dispatch Launches Advisor Transitions Platform to Automate Firm Moves, reflecting the industry's growing focus on streamlining transitions. Meanwhile, Cetera, Osaic, Ameriprise Recruit $950M in Combined Assets, showing that recruitment battles continue even as disputes over U5 language persist.
