Bryan Vescio, et al vs. Bryan Advisory Services LLC, et al

Case Background

On November 21, 2020, Plaintiff  Bryan Vescio and William Vescio filed a Defamation lawsuit in the Pennsylvania Court of Common Pleas, Fifth Judicial District(Case number: 1:19cv604). This case was assigned to District Judge Anne M. Nardacci and referred to Magistrate Judge Daniel J. Stewart.

Cause

In late 2020, financial advisers William Vescio, Bryan Vescio, and Kathryn Constantakis, employed by Vescio Asset Management LLC (VAM), pursued registered investment adviser status for their firm. At that time, VAM contracted Bryan Advisory Services LLC (BAS) for regulatory compliance and billing services. However, when BAS principals Richard Bryan, Karen Bryan, and Rebecca Bryan learned of VAM’s plans, they allegedly severed their professional ties with the Vescios and Constantakis.

Injuries

The injury stemmed from BAS filing U5 forms with the Financial Industry Regulatory Authority (FINRA), alleging the Vescios and Constantakis defrauded customers. BAS claimed they used VAM letterheads to redirect payments away from BAS. These allegations in the U5 forms triggered a defamation lawsuit, as they risked destroying the financial advisers’ professional reputations and future business opportunities.

Damages

The U5 filings posed severe risks to the careers of the Vescios and Constantakis. These allegations could have caused lasting reputational harm, jeopardized their ability to attract clients, and impeded their capacity to maintain professional licenses. The defamation lawsuit highlighted the significant financial and emotional toll inflicted by BAS’s accusations, which threatened their credibility and earning potential in the financial advisory industry.

Key Arguments and Proceedings

Legal representation

  • Plaintiff(s): Bryan Vescio | William Vescio | Kathryn Constantakis
    • Counsel for Plaintiff: John A. Caputo
  • Defendant(s): Bryan Advisory Services LLC | Karen A. Bryan | Rebecca A. Bryan | Richard G. Bryan
    • Counsel for Defendants: Patrick K. Cavanaugh | Zachary N. Gordon

Claims

Constantakis and the Vescios filed separate lawsuits in the Court of Common Pleas of Allegheny County, Pennsylvania. The lawsuits, later consolidated, alleged that BAS maliciously filed fraudulent U5 forms to retaliate against their plans for independence. In April 2021, the Court issued a preliminary injunction ordering BAS to revise the U5 forms, removing fraud allegations. This ruling reinforced their claims of malicious interference and supported the defamation lawsuit against BAS.

Defense

In their defense, Bryan Advisory Services LLC (BAS) contended that the allegations in the complaint were baseless. They argued that the allegations misrepresented their legitimate business actions. BAS maintained that they filed the U5 forms in good faith to address concerns about the conduct of William Vescio, Bryan Vescio, and Kathryn Constantakis.

BAS further asserted that their actions complied with regulatory obligations under the Financial Industry Regulatory Authority (FINRA). They argued that the accusations of malicious intent were speculative and unsupported by evidence. According to BAS, the Plaintiffs’ alleged redirection of client funds through Vescio Asset Management LLC (VAM) provided valid grounds for filing the U5 forms. These forms later became a central issue in the defamation lawsuit.

Additionally, BAS emphasized that their decision to terminate the professional relationship with the Plaintiffs arose from a breach of trust. They argued that the Plaintiffs’ efforts to establish VAM as an independent registered investment adviser violated existing agreements and ethical business standards.

Moreover, BAS contended that the preliminary injunction requiring revisions to the U5 forms did not prove claims of defamation or malicious interference. They argued that the court had not yet determined the validity of the allegations. In denying any intent to harm, BAS sought dismissal of the defamation lawsuit. They asserted that the Plaintiffs lacked evidence to support their claims.

Jury Verdict

In October 2024, the Superior Court of Pennsylvania issued a unanimous verdict favoring the Vescios and Constantakis. The jury held BAS liable for breach of contract, tortious interference, and defamation, marking a significant victory in their defamation lawsuit.

Economic Damages:

  • William and Bryan Vescio: $4 million
  • Kathryn Constantakis: $1 million

Noneconomic and Punitive Damages:

  • Each Plaintiff: $12 million

Total Award: $29 million