In a Financial Industry Regulatory Authority ("FINRA") Arbitration Statement of Claim filed in July 2010, public customer Winograd, representing himself pro se, asserted fraud, negligent misrepresentation, breach of fiduciary duty, breach of the covenants of good faith and fair dealing, negligent supervision, and respondeat superior, for which he ultimately sought $1.6 million in compensatory damages and costs. In the Matter of the FINRA Arbitration Between Lionel Winograd, Claimant, v. Citigroup Global Markets, Inc., Lisa Brandes, David Scott Powers, Respondents (FINRA Arbitration 10-03335, May 31, 2012).
The respondents generally denied the allegations, asserted various affirmative defenses, and sought an expungement of the matter from the Central Registration Depository records ("CRD") of respondents Brandes and Powers.
Claimant withdrew the claims against Respondent Brandes during the hearing in this matter.
The FINRA Arbitration Panel denied Claimant's claims. In recommending the expungement of Brandes and Powers's CRD, the arbitrators explained:
Relying on the exhibits tendered during the hearing and all testimony, the Panel sees nothing to indicate that the facts claimed and allegations made by Claimant happened, and Claimant's claims are thus both clearly erroneous and false.
Bill Singer's Comment
Ooooookay - what?
In keeping with far too many FINRA arbitration decisions, this one is more of a guessing game than a document that offers context and facts. What exactly was Claimant Winograd so upset about? Frankly, other than a nebulous reference to "unspecified securities," the Decision offers no explanation. What prompted a demand for $1.6 million in damages? Hey, knock yourself out, I dunno.
In an effort to fill in some of the blanks, I did some research. Online FINRA regulatory records for Respondent Powers effective as of June 5, 2012, state that:
CLAIMANT ALLEGES, INTER ALIA, THAT THE FA WAS NEGLIGENT WHEN HE FAILED TO FREEZE THE CLAIMANT'S ACCOUNT AND ALLOWED CLAIMANT'S EX-WIFE TO WITHDRAW MOST OF THE FUNDS FROM THEIR JOINT ACCOUNT. TIME PERIOD UNSPECIFIED.
Why the hell the arbitrators or FINRA didn't see fit to include that background in the arbitration Decision is beyond my comprehension. Winograd's financial advisor Powers provided FINRA with the following summary response to his client's complaint:
I AM 100% INNOCENT OF ANY ALLEGED WRONG DOING. THESE FALSE AND MISDIRECTED ALLEGATIONS ARISE AS A CONSEQUENCE OF A CRUMBLING MARRIAGE AND MARITAL DISPUTE.
Additional "Street Sweeper" reading:
Estate Sues Over Lawyer's Designation of Ex-Wife as IRA Beneficiary (May 17, 2011)
- A truly superb FINRA Arbitration Decision involving the issue of a divorced couple's IRA account at Capital One Investment Services LLC.
Mother And Daughter's Convenient Joint Account Leads to Odd Arbitration Win Against Wells Fargo (December 9, 2011)
- A quirky Decision that seems to suggest that a Joint Account between mother and daughter wasn't really a joint account but for the fact that it was - but, you know, not really.
Notary Duped Into Signing Off On Insurance Loans Fined And Suspended By FINRA (June 1, 2012)
- A Merrill, Lynch, Pierce, Fenner & Smith, Inc. registered person gets duped into notarizing a husband's and wife's signatures on a life insurance loan request.