November 22, 2013
In a Financial Industry Regulatory Authority ("FINRA") Arbitration Statement of Claim filed in May 2011, Claimant Ortiz-Aponte asserted unjust and wrongful discharge, retaliation, defamation and libel, unpaid Christmas bonuses and illegal deduction to his payroll. Ultimately, Claimant sought $1,036,591.00 in compensatory damages and $75,000 in attorneys' fees. In the Matter of the FINRA Arbitration Between Wilfredo Ortiz-Aponte, Claimant, vs. RD Capital Group, Inc., Respondent (FINRA Arbitration 11-01843, November 11, 2013).
Respondent RD generally denied the allegations, asserted various affirmative defenses, and filed a Counterclaim asserting breaches of contract and the duty of loyalty, and indemnification in connection with arbitrations filed against Respondent by Claimant's former clients. Respondent ultimately sought $969,701.00 in compensatory damages plus costs, interest, and attorneys' fee.
The FINRA Arbitration Panel found Respondent RD liable and ordered it to pay to Claimant Ortiz-Aponte $15,140.00 in compensatory damages. Respondent's Counterclaim was denied.
Bill Singer's Comment
You sue for a million bucks but you walk away with a $15,000 award -- not exactly a win on the grand scale but, hey, a few thousand bucks and a verdict in your favor counts for something. If I had to guess, I would think that Respondent RD probably feels itself the winner; and that may be based, in part, upon my speculation that the last, best offer of settlement from Claimant Ortiz-Aponte (assuming that there even was an offer), was likely far higher than the $15,140 that the FINRA arbitrators awarded.
Unfortunately, the Decision doesn't exactly provide us with much, if any, content or context beyond some broad reference to an employment dispute and a counterclaim based on some former customer complaints. Given my piqued interest, I did some diggin'.
2008 Enhanced Supervision
Online FINRA records as of November 22, 2013, disclose that on October 21, 2008, the Puerto Rico Office of the Commissioner of Financial Institutions required that RD subject Ortiz-Aponte to enhanced supervision:
RD CAPITAL HAS BEEN INSTRUCTED TO PLACE MR. ORTIZ UNDER ENHANCED SUPERVISION FOR A PERIOD OF SIX MONTHS AUTOMATICALLY EXTENDABLE FOR SIX (6) ADDITIONAL MONTHS BY THE OFFICE OF THE COMMISSIONER OF FINANCIAL INSTITUTIONS COMMENCING OCTOBER 21, 2008.
A Pending 2009 Matter
Online FINRA documents disclose that on June 18, 2009, a customer unsuitability complaint seeking $93,000 was asserted pertaining to an account serviced by Ortiz-Aponte. RD summarized the still pending complaint as:
CLIENT ALLEGES LACK OF SUITABILITY IN THE PURCHASE OF PUERTO RICO BANKS PREFERRED STOCKS. CLIENT ALSO ALLEGES THAT BROKER GUARANTEED PRINCIPAL OF SAID INVESTMENT LOSS OF $93,000
THE REPS DENIED THE ALLEGATIONS SINCE ALL RISK ASSOCIATED WITH THE INVESTMENTS IN THE PURCHASE OF P.R. PREFERRED STOCKS WERE PROPERLY DISCLOSED TO THE CLIENT IN THE PROSPECTUS. THE ALLEGES LOSS [sic] OF SAID INVESTMENTS IS UNREALIZED. CUSTOMER ALLEGES LACK OF SUITABILITY IN THE PURCHASE OF PUERTO RICO BANKS PREFERRED STOCKS. CLIENT ALSO ALLEGES THAT BROKER GUARANTEED PRINCIPAL OF SAID INVESTMENT. AMOUNT LOSS [sic] OF $93,000.
A Closed 2009 Matter
FINRA online records further disclose a closed customer matter involving a customer complaint filed on July 14, 2009, seeking $51,000 in damages, which RD denied. The FINRA record contains an allegation that:
CUSTOMER ALLEGES MISREPRESENTATION IN THE PURCHASE OF PUERTO RICO BANK PREFERRED STOCK
That same online FINRA document asserts that:
COMPLAINT WAS FILED WITH THE PUERTO RICO OFFICE OF FINANCIAL COMMISSIONER AND THE COMMISSIONER DENIED IT
A Settled 2010 Matter
As to settled customer complaints, online FINRA records disclose the filing of a Arbitration Complaint on June 16, 2010, seeking $931,866 in damages and alleging:
ORTIZ MISHANDLING OF [CUSTOMER] ACCOUNT: A) UNSUITABLE INVESTMENTS B) BREACH OF FIDUCIARY RESPONSIBILITIES C) NON COMPLIANCE WITH [CUSTOMERS]INVESTMENT POLICY D) EXCESSIVE TRADING (CHURNING) E) UNAUTHORIZED TRADING F) UNAUTHORIZED MARGIN DEBT.
Although the matter was apparently settled on January 17, 2012, for $250,000, FINRA online disclosure documents summarize:
PRIVATE SETTLEMENT UNAWARE OF REGISTERED REP. CONTRIBUTION AMOUNT.
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