By the time folks wind up in court or arbitration, you often have a lot of hurt feelings, simmering anger, and a camel one straw shy of a broken back. As a recent FINRA intra-industry arbitration shows, the boiling point may be quickly reached. Be warned: there's some nasty language in today's BrokeAndBroker.com Blog -- and there's even an inappropriate video at the end.Case In PointIn a Financial Industry Regulatory Authority ("FINRA") Arbitration Statement of Claim filed in July 2014, registered representative Claimant Cullen, who represented himself pro se, alleged that Respondents Molen, Olson, and Hewitt had terminated his employment at Thrivent Financial in retaliation for his having informed regulators about the allegedly incompetent handling of customer accounts. Claimant further alleged that Respondent Molen had fabricated false, defaming and damaging accusations on his Form U5. In addition to seeking the expungement of his Central Registration Depository records ("CRD"), Claimant sought $200,000 in compensatory damages.In the Matter of the FINRA Arbitration Between Joseph Orval Cullen, Claimant, vs. Stephen Theodore Molen, Knut Andrew Olson and Bradford Leigh Hewitt, Respondents (FINRA Arbitration 14-02348, December 4, 2015).Respondents generally denied the allegations and asserted various affirmative defenses. Motion To Dismiss On November 16, 2015, Respondents filed a Motion to Dismiss based on Claimant's:
FINRA Code of Arbitration Rule 13505. Cooperation of Parties in DiscoveryThe parties must cooperate to the fullest extent practicable in the exchange of documents and information to expedite the arbitration.FINRA Code of Arbitration Rule 13511. Discovery Sanctions(a) Failure to cooperate in the exchange of documents and information as required under the Code may result in sanctions. The panel may issue sanctions against any party in accordance with Rule 13212(a) for:
- Failing to comply with the discovery provisions of the Code, unless the panel determines that there is substantial justification for the failure to comply; or
- Frivolously objecting to the production of requested documents or information.(b) The panel may dismiss a claim, defense or proceeding with prejudice in accordance with 13212(c) for intentional and material failure to comply with a discovery order of the panel if prior warnings or sanctions have proven ineffective.FINRA Code of Arbitration Rule 13212. Sanctions(a) The panel may sanction a party for failure to comply with any provision in the Code, or any order of the panel or single arbitrator authorized to act on behalf of the panel. Unless prohibited by applicable law, sanctions may include, but are not limited to:
- Assessing monetary penalties payable to one or more parties;
- Precluding a party from presenting evidence;
- Making an adverse inference against a party;
- Assessing postponement and/or forum fees; and
- Assessing attorneys' fees, costs and expenses.(b) The panel may initiate a disciplinary referral at the conclusion of an arbitration.(c) The panel may dismiss a claim, defense or arbitration with prejudice as a sanction for material and intentional failure to comply with an order of the panel if prior warnings or sanctions have proven ineffective.
[T]he history of this case reflects a pattern of Claimant's failure to adhere to FINRA's discovery rules and this Panel's orders. During discovery, Claimant produced only one document and provided no written discovery responses. In subsequent meet and confer communications, Claimant was threatening and abusive. As an example, when asked by Respondents' counsel whether there would be any further responses. Claimant e-mailed:
See sweetie, you're just like that little bitch you represent, and the merchant suckers you whore yourself out too [sic]...You have nothing to substantiate your claim to begin with.. . .
The Panel finds that Claimant's failure to comply with FINRA's discovery rules and the order of the Chair was intentional and material. In addition, the Chair's November 3, 2015, order was a clear warning that Claimant's actions were sanctionable. Nevertheless, he failed to comply with that order. The Panel also cannot turn a blind eye to Claimant's threatening and abusive responses to Respondents' counsel's legitimate inquiries.
In accordance with its findings, the FINRA Arbitration Panel unanimously ordered that all of Claimant Cullen's claims be dismissed in their entirety with prejudice.Bill Singer's Comment2013 Arbitration ClaimFINRA's online arbitration records disclose that a FINRA Arbitration Statement of Claim was filed in April 2013 by Claimant Cullen, who represented himself pro se, and he alleged failure to supervise, negligence, compensation owing, failure to execute, and defamation. Claimant sought $18,000 in compensatory damages, interest, attonreys' fees, and costs.In the Matter of the FINRA Arbitration Between Joseph Orval Cullen, Claimant, vs. Janice Suutala and Thrivent Investment Management, Inc, Respondents (FINRA Arbitration 13-01153, February 25, 2014).
RR CULLEN ADMITTED TO SUBMITTING A FALSE WRITTEN STATEMENT TO A FINRA ARBITRATOR IN THE COURSE OF AN INDUSTRY ARBITRATION AGAINST THE FIRMYou know, I gotta tell ya, I find it hard to believe that Cullen had admitted to submitting a false written statement to a FINRA arbitrator. If he did, then I wish that Thrivent had spelled out the date of this admission and the nature of the false statement. Given the seriousness of potentially perjuring oneself during an arbitration, I'm also curious as to whether Thrivent filed any criminal charges against Cullen or brought the alleged falsehood to the attention of FINRA or any industry regulator. Notably, there is no indication in the February 25, 2014, FINRA Arbitration Decision that the sole FINRA Arbitrator found that Cullen had submitted a false written statement during the arbitration.