In a Financial Industry Regulatory Authority ("FINRA") Arbitration Statement of Claim filed in September 2012 and amended thereafter, Claimant Lampert, representing himself in a pro se capacity, ultimately sought $86,752.66 in compensatory damages plus punitive damages, costs, and treble damages arising from a dispute over employment compensation. In the Matter of the FINRA Arbitration Between Stewart Randy Lampert, Claimant, vs. Morgan Joseph Triartisan LLC, Respondent (FINRA Arbitration 12-03252, August 27, 2013).
Respondent Morgan Joseph Triartisan ("MJT") generally denied the allegations, asserted various affirmative defenses, and filed a Counterclaim asserting unjust enrichment and seeking at least $7,183.25. The Counterclaim was withdrawn at the conclusion of the hearings.
The Crossroads of Confusion
The FINRA Arbitration Panel held that Claimant Lampert's claims were precluded by the terms of some 2009 agreement and release; however, the Panel further found that Respondent MJT had an obligation to arbitrate the underlying dispute.
FINRA Code of Arbitration for Industry Disputes 13200. Required Arbitration
Except as otherwise provided in the Code, a dispute must be arbitrated under the Code if the dispute arises out of the business activities of a member or an associated person and is between or among:
• Members and Associated Persons; or
• Associated Persons. . .
SIDE BAR: All of which leaves us at a puzzling crossroads.
If we go down one path, we will apparently find that it's a dead end because Claimant Lampert's claims were purportedly filed too late to satisfy applicable statutes of limitation and/or eligibility rules.
If we go down the other path, we seem to be confronted with a detour sign indicating that even though the claims were filed too late, Respondent MJT purportedly had an obligation to arbitrate those claims when they were still timely but apparently failed to honor that obligation.
I don't like guessing games when it comes to FINRA Arbitration Decisions. Frankly, I have no idea whatsoever as to the nature of the 2009 agreement and release. Perhaps the parties had previously reached some settlement about the issues but a disagreement subsequently arose and instigated the FINRA arbitration? Your guess is as good as mine.
The FINRA Arbitration Panel found Respondent MJT liable and ordered it to pay to Claimant Lampert $15,566.75 in exemplary damages because the former employer had "unilaterally withheld disputed money instead of turning to FINRA to make a determination regarding that issue."
Bill Singer's Comment
Among the most common question that I and other veteran industry lawyers are asked is "Can they do that?" To which we often answer something along the lines of "Yes but . . ." The variations on that "Yes but" theme are
For example: FINRA Hits Merrill Lynch With Historic $1 Million Fine For Circumventing Mandatory Arbitration During Collection of Employee Promissory Notes (BrokeAndBroker.com, January 26, 2012).
Watch the following episodes from the video library at "Side Bar With Bill Singer":