The former general counsel of Feltl & Co., has sued the Minneapolis securities firm for "damaging" his reputation through a public statement last month.
Feltl said without naming Chet Taylor, its former attorney, that it had replaced him and three others as a consequence of stock-trading infractions from 2008 to 2012, an episode that led the firm to a $1 million settlement with an industry regulator.
Taylor is a veteran securities lawyer who worked for Feltl and a predecessor firm as an independent or house lawyer since 1990. Taylor said he left Feltl in good standing in 2012, over the protests of Feltl owners and senior managers, and after he had hired an independent attorney to represent the firm during the trading-violations investigation.
Thomas Steichen, Feltl's current general counsel, said in an e-mail response: "Feltl and Company has reviewed Mr. Taylor's claim and believes that it has no merit."
Taylor said he sued after Feltl refused to correct the "misrepresentations" in a "corrective action statement" it issued last month that outlined its steps to improve regulatory compliance, management oversight and other measures.
The firm has exited a "penny-stock" trade-solicitation business with its clients that got it in trouble with the Financial Industry Regulatory Authority (FINRA).
In the recent "corrective action" statement, Feltl said it "replaced the general counsel, chief compliance officer, head trader and a branch manager from the relevant period. The current Feltl employees occupying these positions will further enhance a culture of compliance at the firm."
Taylor said he had been trying to leave the firm to resume private practice since 2011, even though owners John Feltl and Mary Jo Feltl wanted him to continue. He resigned in September 2012 and continued to do some work for Feltl as an independent lawyer.
"The clear implication of that [corrective action statement] language is that Feltl & Co. fired me due to poor job performance that contributed to the penny stock violations and the $1 million fine," Taylor said. "That is absolutely, 100 percent false. I left voluntarily in September 2012, on good terms with Feltl and with no connection whatsoever to the alleged penny stock violations."
Taylor said in his suit that he was denied a September meeting with Feltl management to discuss the issue and "correct the misrepresentations."
Taylor seeks a judgment that would "delete the defamatory language" from a new corrective action statement, require Feltl to take newspaper ads correcting the statement and award him more than $50,000.
Neal St. Anthony • 612-673-7144
