Allstate Insurance has asked the Seventh Circuit Court to toss out a $27 million verdict in favor of four equity traders who claim the company defamed them.
Allstate equity division head Daniel Rivera and traders Deborah Joy Meacock, Rebecca Scheuneman and Stephen Kensinger were fired in 2009 after an investigation into whether employees were timing trades to inflate their bonuses. All four were fired for violating company ethics. They sued the insurer for defamation, also claiming that Allstate hadn’t made the proper legal disclosures before terminating them.
In June of last year, a jury awarded the fired traders $27.1 million. However, Allstate appealed the verdict, saying that the traders were unharmed by the supposed defamation and insisting that the proper disclosures had been made when they were fired.
The traders insisted that due to the small size of the equity trading community, it was easy for prospective employers to deduce that they were the four fired Allstate employees referred to in public investor filings.
“That is pure speculation that falls far below the evidentiary threshold for special damages,” Allstate said in a court filing. “Plaintiffs merely offered evidence that they were not immediately hired for competitive, high-paying jobs…”
Allstate said that the statements made in the investor filings and a memo, known as the “Greffin Memo,” were true, and pointed out that the traders were not actually named in any of the documents. The insurer also said that the traders didn’t prove they were rejected by prospective employers because of the statements in those documents.
“They did not call a single prospective employer – or other witness – to testify that their job applications or business opportunities were rejected because of the statements in the 10-K or Greffin Memo,” the insurer said. “In fact, they called no witnesses who testified that he or she even read the allegedly defamatory statements.”
