An irreverent Wall Street Blog
by Bill Singer
Join BrokeAndBroker blog on Facebook  Follow the BrokeAndBroker blog on Twitter  Connect with BrokeAndBroker on LinkedIn  Join Bill Singer on Google+  Subscribe to RSS Feed

Brokerage Firm Goes All In But Loses High Stakes Employment Arbitration Poker Game
Written: May 23, 2012

LAS VEGAS, NV - DECEMBER 18: Commissioner of t...

This FINRA employment arbitration looked a lot like a game of high stakes poker

In a Financial Industry Regulatory Authority (“FINRA”) Arbitration Statement of Claim filed in August 2010, the asserted that Respondent Reuven Enterprises Securities Division had failed to reimburse their 2010 state registration fees. In the Matter of the FINRA Arbitration Between Gaurav Lall, Tamir Shabat, Danny Z. Spiegel, Claimants vs. Reuven Enterprises Securities Division, LLC, Respondent, vs. Synergy Investment Group, LLC, Third-Party Respondent(FINRA Arbitration 10-03660, May 21, 2012).

Respondent Reuven Enterprises generally denied the allegation and asserted various affirmative defenses. Also, Respondent filed a Counterclaim and a Third-Party Claim against Third-Party Respondent Synergy, both claims alleging:

  • raiding,
  • unfair business competition,
  • loss of business,
  • defamation,
  • loss of revenues,
  • breach of confidentiality and intellectual property,
  • misappropriation, and
  • breach of contract.

Okay — so it’s gonna be one of those.  So much for the lecture about a clean fight, shake hands, and the like.  This is gonna be ugly, one way or the other.

See Ya And Raise Ya

Things likely went from bad to worse because Claimants’ initial request for compensatory damages was a measly $5,687.00.

In its Counterclaim and Third-Party Claim, Respondent requested compensatory damages in the amount of $11,085,000.00, unspecified punitive damages, reasonable legal expenses, administrative expenses, travel expenses, and regulatory fees associated with the filing of any of these claims.

Yup – I’ll see you and go all in. We got about five thousand Bid versus eleven million Ask. Quite the spread!

By the close of the hearing, Respondent reduced its multi-million damage claim to a mere $577,000 to $5,400,000.00 range.  I’m not quite sure how you have a range of about half a million bucks to some ten times that amount but, hey, more the merrier, I guess.

In its Answer to the Third-Party Claim, Third-Party Respondent Synergy sought an expungement of the matter and an award of $150,000 in attorneys’ fees. By the close of the hearing, Synergy graciously reduced that attorneys’ fee request to $50,000.00 (Claimants joined in on that fee request during the hearing). During the hearing, Synergy did not pursue the expungement claim and the FINRA Arbitration Panel denied the request without prejudice.

At the hearing, Claimants and Synergy requested an award of punitive damages in an amount to be determined by the Panel.

Let’s Not Get This Party Started

Yaron “Ron” Reuven was not named by Claimants as a Respondent; however, they sought to name him in their Answer to the Counterclaim and Synergy attempted to follow along in its Answer to the Third-Party Claim. Notwithstanding, Yaron “Ron” Reuven did not sign a Submission Agreement or file a pleading on his own behalf .  Ultimately, the FINRA Arbitration Panel determined that Yaron “Ron” Reuven was not a party to this arbitration.


The FINRA ArbitrationPanel found Respondent Reuven Enterprises liable and ordered it to pay to:

Claimant Lall: $2,143.00 in compensatory damages;

Claimant Spiegel: $1,376.00 in compensatory damages; and

Claimant Shabat: $2,168.00 in compensatory damages. 

Additionally, Respondent Reuven Enterprises was ordered to pay to Claimants and Synergy $50,000 in joint attorneys’ fees.

Finally, the Panel ordered Reuven Enterprises to pay to Claimants and Synergy Investment $100,000 in punitive damages because Respondent

  • brought a  frivolous Counterclaim and Third-Party;
  • failed to maintain discovery evidence;  and
  • deleted relevant computer records.

Bill Singer’s Comment

These things happen.  Former employees and their former employer have a falling out.  In this case, it appears, among other things, to have taken the form of a dispute over the reimbursement of state registration fees.  However, that’s just in this case.  In other industry disputes, you name it and it becomes the basis for litigationAs I have detailed in many “Street Sweeper” columns, this crap happens all over: Merrill Lynch, Morgan Stanley,UBS, Wells Fargo — pick the firm and there are employment disputes.

Given that Wall Street is supposedly about money — big money — and about mature professionals entrusted with handling those funds, you would hope that reasonable men and women would generally find a way to sort through these often piddling disputes.  But they don’t.  And as an attorney who makes a living handling these things, who am I to complain?

The mystifying aspect of today’s column is that Claimants were seeking a lousy $5,000.  In response to that demand, the former employer comes back with an $11 million dollar damages claim.  I mean, seriously?  C’mon guys, with all due respect, if you had sustained such damages then why didn’t you beat your former employees to the arbitration forum and file first?  Yeah, sure, I bet that I can guess: It was about the principle.  Uh, huh.  Well, congratulations!  You managed to stand on your principle and that apparently turned the $5,000 claim into an award of about $155,000.  So — the value of your principle was about $150,000.


Previous Entries
May 23, 2015
SEC Commissioner Stein Stands Alone In Her Defense Of The Investing Public And IndustryOne, and only one, Securities and Exchange Commissioner got it ... Read On
May 22, 2015
One, and only one, Securities and Exchange Commissioner got it right. To her ever-lasting credit and to the shame of her colleagues, Commissioner Kara... Read On
May 21, 2015
Yesterday, I tried to predict the future. A few hours before the United States Department of Justice announced its settlement with JPMorgan Chase, Cit... Read On
May 20, 2015
It is now 8:30 a.m. EDT on May 20, 2015 and I am posting this Blog without much enthusiasm – I think the fancy French word for ho... Read On
May 19, 2015
Stockbroker, Compliance, Legal, and Regulatory JobsEmployment Jobs#wallstreetjobs@brokeandbrokerNOTICE TO EMPLOYERS: BrokeAndBr... Read On
May 18, 2015
The United State Court of Appeals for the Ninth Circuit ("9Cir") affirmed the Central District of California's ("CDCA's") judgment in a clas... Read On
May 18, 2015
There comes a point in a registered representative's career when it may simply be time to move on. For many reps who decide to relocate, the questions... Read On Job Search

Related Topics
Tag Cloud
Internet FINRA Bear Stearns Bloomberg SEC NASD NYSE Money Laundering Due Diligence Waiver Forbes China Broy Woody Allen Madoff NAC NPR Marketplace Stanford UBS Ketchum Antitrust NASDAQ RRBDLAW Schapiro Bill Singer BrokerAndBroker USERRA Morgan Keegan Arbitration Counterclaim Khuzami BrokeAndBroker Aleynikov Goldman Sachs brokeandbroker Promissory Note U4 Bill SInger EFL CFTC Huffington Post Flash Crash arbitration RBC Ponzi Affinity Fraud Wachovia Criminal Raymond James Expungement Fraud Securities Fraud Outside Business Activity Registered Rep Magazine FOREX FBI Banc of America Pro Se PCAOB Supreme Court Morgan Stanley Smith Barney E*Trade Margin email Galleon Penson U5 Defamation Protocol Wells Fargo Punitive Damages Citigroup Merrill Lynch ARS Employee Forgivable Loan Street Legal Morgan Stanley AWC Fidelity Bankruptcy Broke And Broker HFT David Sobel Day Trading Ameriprise Commissions Spouse Schwab Commission CRD Kenneth Starr IRS CNBC Complaint ATM Skimming Hacking Phishing Malware Naskovets Poteroba Koval Lincoln Financial Selling Away Outside Business Activities Rakoff 2nd Circuit Second Circuit IRA 401k Forgery Tax Email Netschi Moore Whistleblower Street Sweeper Countrywide Tran Bharara Facebook Online Severance Bonus Eligibility Rule TD Ameritrade Hedge Fund SAC 1099 Smith Barney Lehman Brothers SIPC IC3 Scottrade Lehman JPMorgan Chase Hertz Insider Trading Bank of America Department of Justice Elles Bribe Auction Rate Securities Raiding Spam Edward Jones Medicare Diabetes Dow Schumer Thain Walter Bid Rigging Real Estate Discrimination Wall Street Statutory Disqualification Form U4 Form U5 Indictment Boyland DOJ Corruption bill singer FTC Do Not Call FINRA Arbitration Costa Rica Settlement LIBOR Varney Plea Rule 8210 Eligibility RRBDlaw 8210 Appeal Fowler LPL Johnson Cellphone US Airways JPM BrokeandBroker Reg D MSSB Vault Loan SunTrust Discovery Employment Rosenthal Recruiting Lawyer Trading Platform JP Morgan Employment Tuesday Wrongful Termination Bank Guarantee WaMu Solicitation REIT Martin Credit Cards Rule 3050 Away Account Credit Repair PN Advisor Placement Group Fifth Amendment Forex Mortgage Private Placement Moon CGMI Failure to Supervise Merrill Anderson Exam Lee Borrowing Tax Lien Conversion Oppenheimer Wedbush Felony Misdemeanor Expenses ING Lien OTR Estate Jobs Florida Credit Card Elderly Flash Drive Annuity Expense Reimbursement FNMA BrokeAndBroke TIC DWI Promissory Notes Suitability Will POA Power of Attorney Casino NSF MF Global Counterfeit Preet Bharara Corzine Hacker Deferred Compensation RIA Prison Disclosure NASAA Aguilar FCPA Subway Testimony Identity Theft Gold Dell Bar Injunction Bank Deutsche Bank Hospital Due Process God HSBC Private Placements Eric Stein Wire Fraud FINOP CCO Compliance Audit Joshua Brown Backstage Wall Street Obstruction of Justice Reuters Retaliation Variable Annuity Arbitraiton Outside Account Options Telephone Wine Series 7 Social Media ADA Pacifico Non-Prosecution Agreement Confirm Tax Fraud Retirement OBA Equity Indexed Annuities EIA Disability MetLife Continuing Education Cheating OIP Tax Liens Willful CE Unregistered Impersonation Annuities BBVA Business Expenses ETF JOBS Act Mail Fraud Parking Variable Annuities Signatures BitTorrent Impersonator Wire Transfer Wire Crowdfunding Nasdaq Away Accounts WSP Laptop Dodd Frank Checks RMBS AML PST Solicited Unsolicited Congress SRO Password Wife Discretion Non-Solicitation Restaurant Commodities Private Securities Transaction Offer of Settlement Money Market employment jobs Great Recession Chase Investment Services Arrest Barclays Liens Failure To Supervise Apple Time And Price T&P Willfully Husband Letter of Authorization LOA Sexism Debit Card Knight Test Practice Sale Unfair Competition Signature Judgments Undisclosed Settlement Trainee Fee Trust Laser Side Bar Mattera Female Sales Assistant Kennedy Charge Sexist NML Argentina Embezzlement Silver Investor Alert Evidence Judgment Bank Fraud Deceased Bill Singer BrokeAndBroker TSSB OHO Leveraged ETF Mary Jo White Trustee Motion To Dismiss Frumento Conspiracy 6th Circuit Proctor Commissioner Stein Rule 3040 Customer Files Class Action Beneficiary NYAG Schneiderman 11th Circuit Insurance Gallagher White Self Regulation Short Sale Compromise Website Rule 2010 Check TRO Supervision Vacatur Remand SDNY Rule 12206 BrokeAndBroker Bill Singer Piwowar Stifel Rule 1122 Article V signature Confidential Inside Information Reg SP VA Regulation SP Fees Cease And Desist Customer Rule 3270 Rule 3240 Annual Compliance Questionnaire OWB 2Cir Red Flags Payroll Stockbrokers ALJ Cybercrime Loans BrokerCheck Altered Records
Email Bill Singer Connect with Bill Singer on Facebook Follow Bill Singer on Twitter Link up with Bill Singer on LinkedIn Join Bill Singer on Google+