This one just did - see what the court had to say
Investment firms can breathe easier after a New York court ruled they're protected from defamation lawsuits when reporting employee misconduct to financial regulators.
If you've ever hesitated before filing a regulatory report about an employee, worried they might sue you for defamation, a New York appeals court just gave you some peace of mind.
On January 28, the Appellate Division ruled that Northwestern Mutual Investment Services can't be sued for telling FINRA and state regulators about an assistant who allegedly copied client signatures onto documents. The employee claimed the allegations were false and damaged her career. The court disagreed, saying the firm had absolute protection when making those disclosures.
The case started when Nicole Galanos worked as an assistant to Jeffrey Polanco, an insurance agent who had a contract with Northwestern Mutual. The firm started investigating possible alterations to client-signed documents.
Northwestern Mutual brought in Polanco and Galanos for meetings about the investigation. After Galanos stepped out of the room during one meeting, Polanco allegedly told a company representative that Galanos "did copy the signature."
The investigation ended with Northwestern Mutual cutting ties with Polanco. Since Galanos worked under his contract, she lost her position too.
Then came the regulatory notifications. Northwestern Mutual notified FINRA and the New York State Department of...
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