An irreverent Wall Street Blog
by Bill Singer

Wanton Disregard Cited In FINRA Raiding Arbitration

October 27, 2016

When BrokeAndBroker.com Blog publisher Bill Singer gets frustrated, he gets hungry. Today, Bill is very frustrated with an intra-industry FINRA arbitration. The dispute set up as a fairly interesting one involving allegations of unfair competition and raiding. In addition to the usual former employer versus former employee parties, we also have the new employer cast in the role of possibly aiding and abetting its new employee's misconduct. On top of everything, the arbitrators really, really, really didn't like some of the respondents actions, which the arbitration panel slammed as "wanton disregard." Unfortunately, just when we thought we were going to get a nice morsel to chew on, the FINRA Arbitration Decision leaves us hanging. That got Bill's stomach acids working overtime. Fact is, he's got a dying urge for Wonton Soup.

Case In Point

In a Financial Industry Regulatory Authority ("FINRA") Arbitration Statement of Claim filed in August 2015, Claimant BMO Harris Financial Advisors, Inc. asserted:
  • breach of contract; 
  • unfair competition and raiding; 
  • tortious interference with contracts between Claimant and its customers, with business relations, and with prospective economic advantage; 
  • breach of duty of loyalty; 
  • aiding and abetting breach of fiduciary duty of loyalty; and 
  • tortious interference with contract. 
That above laundry list of causes of actions clearly alerts us that the parties are in a gladiatorial fight to the death. The business folks involved in fomenting this crap should know better but they rarely do; and the lawyers that they hire loooooooove this stuff since it's often a massive hourly fee. Ave Imperator, morituri te salutant.


Claimant BMO alleged that after Respondent Moscicki resigned on July 31, 2015, he violated his employment agreement's non-compete covenant when he began contacting all of the customers he had previously served while employed with BMO. Further, Claimant alleged that "in exchange for a large share of the transfer of these clients," Respondent Wintrust offered Respondent Moscicki a substantial forgivable loan. As of November 2015, Claimant alleged that Respondent Moscicki had solicited the transfer of a large amount of assets from Claimant BMO to Respondent Wintrust. Claimant sought unspecified compensatory and punitive damages, fees, and costs. In the Matter of the FINRA Arbitration Between BMO Harris Financial Advisors, Inc., Claimant, vs. Wayne Hummer Investments, LLC, d/b/a Wintrust Wealth Management and Neil Moscicki, Respondents (FINRA Arbitration 15-02080, October 11, 2016).

Respondents requested the dismissal with prejudice of Claimant's claims 

Injunction

Following four hearings in September and October 2015 on Claimant's Request for a Permanent Injunction, the FINRA Arbitration Panel imposed a Permanent Injunction. Unfortunately, the FINRA Arbitration Decision does not provide us with the parameters of the Permanent Injunction.

Award

The FINRA Arbitration Panel found Respondent Wayne Hummer Investments, LLC, d/b/a Wintrust Wealth Management and Respondent Neil Moscicki jointly and severally liable and ordered them to pay to Claimant BMO Harris Financial Advisors, Inc. $1,025,000.00 in compensatory damages and $512,500 in punitive damages. The arbitrators issued such an Award "based on the wanton disregard for the rights of Claimant."

Bill Singer's Comment

Of for godsakes . . . really? FINRA actually allowed this Decision to be issued with so much content and context missing? 

I mean, c'mon, if you're going to award over $1.5 million in damages (of which there is a $500,000 punitive component) and also find that respondents engaged in "wanton" disregard for a claimant's rights, howsabout you offer some meaningful content and context. There is virtually no explanation of the calculation that produced the roughly $1 million in compensatory damages. Moreover, you'd sort of think that there would be some rationale provided as to why the arbitrators tacked on another $500,000 in punitive damages -- and don't tell me it's because they found the misconduct to be "wanton" because that's simply circular reasoning. What conduct added up to not mere disregard for Claimant's rights but wanton disregard? 


As you likely can tell, I am infuriated by this FINRA Arbitration Decision. The facts at issue are frequently litigated in intra-industry disputes and it would help future litigants (and possibly promote settlements) if arbitrators published sufficient commentary so that the industry better understood the deliberative process and how the competing points were weighed.  The momentous nature of the dollars awarded should have prompted something more than X alleged this, Y alleged that, and we find Y engaged in wanton disregard.

Also See:

"FINRA Arbitrators Enjoin Brokerage Raid And Enforce Non-Compete" (BrokeAndBroker.com Blog, January 18, 2012)

Permalink

Search BrokeAndBroker

Related Topics

Previous Entries

Tag Cloud

Bill Singer BrokeAndBroker FINRA Arbitration AWC SEC BrokeAndBroker.com Expungement Employment Street Sweeper Jobs Bill SInger Wells Fargo OBA Fraud Promissory Note U5 Email U4 Wire Fraud UBS Forbes Elderly Merrill Lynch FBI Morgan Stanley EFL Statutory Disqualification PST ALJ Defamation Suitability Citigroup Borrowing Ponzi CRD Rule 3270 Outside Business Activity BrokerCheck OIP Whistleblower IRS Supervision Form U4 Wachovia Felony Bank Willful DOJ Wrongful Termination Supreme Court Mail Fraud NAC SDNY Guest Blog BrokerAndBroker Expenses CCO Insider Trading Employment Tuesday Checks Pro Se Form U5 Discretion Ameriprise Conversion Madoff Punitive Damages Bankruptcy IRA WSP Raymond James Credit Card Rule 3240 NASD Rule 3040 OHO Discovery Tax Willfulness Private Securities Transaction Forgery Wife Rule 8210 Dodd Frank Rule 2010 Rule 1122 RIA Husband Indictment Outside Business Activities Estate Rule 2080 JP Morgan Real Estate Power of Attorney LPL Business Expenses Street Legal Guest Blogger Exam Wall Street Settlement Commissions Tax Lien ATM Impersonation Edward Jones NYSE Facebook Small Firm Bank of America Case In Point Rule 3280 Stephen Kohn Bar Corrective Action Statement Antitrust Annuities 2Cir Mortgage Test Appeal Tax Liens SRO Margin Schapiro Wire BrokeAndBroker ARS Schwab Offer of Settlement Complaint NSF Employee Forgivable Loan Trust Goldman Sachs Rule 2510 Securities Fraud Spouse Trustee ETF Signatures Beneficiary NASAA Conspiracy Promissory Notes HFT Misdemeanor PCAOB Lien Loan T&P Fidelity VA Cease And Desist Due Diligence RBC Chase Signature Flash Crash Initial Decision Injunction Deutsche Bank Huffington Post Unauthorized Discretion Money Laundering LOA Annuity CFTC DCCir NASDAQ Barclays Away Account Frumento Credit Cards Bharara Mandatory Arbitration Liens Variable Annuity Unfair Competition Scottrade OTR MSSB Gallagher Registered Rep Magazine Bonus Continuing Education Lehman Brothers Identity Theft RRBDLAW.com Spouses email Hacker POA Remand Compliance Failure to Supervise E*Trade Rule 12206 Insurance Solicitation Letter of Authorization Forex Malware employment Eligibility Rule Burris JPMorgan Stockbrokers Wedbush Options Stay Rule 3010 Annual Compliance Questionnaire Audit FINRA Arbitration Registration TRO Rule 12805 Will Solicited 2nd Circuit FINOP Rule 3050 Customer Complaint Fiduciary Website Customer jobs Second Circuit Away Accounts LIBOR Net Capital brokeandbroker Prison Undisclosed Settlement Hacking Social Media arbitration Great Recession Wey Lehman Broker Protocol Dissent Private Securities Transactions Rule 4511 Disclosure OWB Trading Platform Sanctions Motion to Dismiss BOP Reg SP Newman Telephone Plea Brummer Judgments BrokeAndBroker Bill Singer Willfully Reimbursement Unsolicited 10Cir RRBDlaw.com Retirement Time And Price FOREX Private Placement Internet IC3 Apple RMBS Rule 4530 Bureau of Prisons BrokeandBroker Stifel Explained Decision Divorce Examination Hedge Fund Zipper Piwowar Spoofing Cheating NYAG Rule 12200 China Unauthorized Trading DOL Confidential Information Unsuitability Rakoff Auction Rate Securities Arbitraiton Personal Expenses Deceased MetLife Lucia Crowdfunding Obstruction of Justice Variable Annuities Check Kiting Knight Commission Disgorgement Rule 2111 REIT Protocol Self Regulation ADA Indemnification EIA Postponement OIG Board PN Bandimere Conflict Gold Debit Card SAC Vacatur Churning Passcode Phishing Affinity Fraud Appointments Clause Medicare Jurisdiction Woody Allen Charge Reg D Banc of America Executor Affiliate Compensation Class Action Article V WSPs JOBS Act Wine Joshua Brown High Frequency Trading Rule 2150 Bonds Wire Transfer IPO Aleynikov Retaliation Botkin OSHA Fees Khuzami FNMA Sanction Guidelines Sexist Regulation SP Morgan Keegan Discrimination Confidential MF Global Dakota Securities Aegis Frumento Rule 2081 Lawyer Hilton Weiner Raiding Due Process Waiver Hurry MC-400 bill singer Stanford PNC Shah Gilani Ketchum 9Cir Online Chief Compliance Officer Disability Laptop Unregistered Bank Fraud Small Firm Governor Kon White McDuff Rosenthal Recruiting Information Smith Barney CE CEO Restaurant Emails AML Poteroba 401k Failure To Supervise TD Ameritrade Widow Imposter Charles Schwab Parking Statement of Corrective Action Morgan Stanely Whistleblowing Eligibility 6th Circuit Vault Rule 3030 Concentration Written Supervisory Procedures Embezzlement ING Private Placements Marijuana Series 7 USERRA Customer Information Rule 13805 Elder Abuse Reg S-P Charity Employment Agreement Consent Order Oppenheimer NPR Sales Assistant Hearing Marketplace Stifel Nicolaus Penson Morgan Stanley Smith Barney Finder\'s Fee Marine Corps Mutual Fund Pennystock ACQ Check Testing Commodities Fraud Whitman Marines Johnny Burris Teleconference Casino Guitron Yesenia Guitron Vietnam Government Accountability Project Ride the Thunder HSBC Pennystocks Suspension Mutual Funds Aguilar Unjust Enrichment Testimony Accounting Bloomberg Sexism Rule 3110 Bear Stearns Corzine Side Bar Deferred Compensation Dementia Confirm Day Trading Bid Rigging Termination Self Regulatory Organization Statute of Limitations Loans Corruption Sexual Harassment Dell Inability to Pay Arrest BD Mother FCI BrokerAndBroker.com Layering Inmate Commissioner Stein Chase Investment Services Credit Suisse Red Flags FCI Beaumont ACH expungement Guest Bloggers Robert Cook 401(k) BrokeAndBroker.com Blog FINRA AWC TOD Kiting Department of Justice Fowler CRS Backstage Wall Street Hospital Leveraged ETF Non-Solicitation TSSB Female CPA Do Not Call Taft Correctional Institution Fine Commodities Counterclaim Elles Congress RRBDlaw Unauthorized Practice of Law Reverse Life Insurance Rule 9216 PAQ Christian Stanley 40 Act Over Concentration Circuit Court Sharemaster David Sobel Broke And Broker 4Cir Stipulated Award Schneiderman 11th Circuit Timban Motion Administrative Remedies Scottsdale IAR Tortious Interference Motion to Vacate Form ADV Puerto Rico Netschi Moore Negligence Chiasson Investor Alert CGMI CNBC Judgment Moon Lincoln Financial Star Wars Medical Condition Fifth Amendment Statutory Disqualification Committee Third Party Vendor WaMu Research BATS Thain FOCUS Membership Continuance Tax Fraud Rule 2210 Client Information OCIE Scholander Board of Governors OWWP SunTrust Stockbroker Rule 2370 TheBlot Equity Indexed Annuities Outside Accounts SP TIC Margin Call Severance Feigenbaum Outside Account Investment Adviser Trade Secrets Florida Inside Information Probate Oral Discretion Argentina Verbal Discretion Unsuitable signature Rule 1031 Rory Flynn Standing Practice Sale Costa Rica Obamacare Varney MSPB Nationwide Boyland FTC Bill singer Trainee Fee Expert Witness Reason for Termination Undercover Springsteen McCartney Data Escrow Newport Coast Securities Office of Special Counsel Securities Industry Commentator Wages Manifest Disregard Personal Information NYG Capital BrokeAndBroke Fiero Annual Audit 17a-5 Outside Counsel Fines Chevron FDA Test Center DWI Reuters In House Counsel FINRA Small Firm Oilpro Cannabis Kent Cherry Picking Subpoena AXA Trader Expense Flash Drive Relevant Summary Judgment Hugh Hewitt AWC. FINRA Pension Promoter Disciplinary History CDO Texas State Securities Board Apartment Stephen A. Kohn Subway Prime Bank FCPA Joint Account God SD Branch Manager Eric Stein Undertaking Lek Jon Corzine Financial Disclosure Preet Bharara Counterfeit Texting Checking Exhaustion Doctrine Pacifico FINRA Board Impersonator Nasdaq Conflicts Turbeville Willfull BitTorrent Liquidation Salman Service Resignation Scam Reverse Merger Johnson Grievance Rule 4513 8210 Cellphone US Airways MBS Goble JPM Password BBVA FMLA Collateral Bar Retroactive Bar Municipal Advisor NRSRO Bartko Lee Retroactive Non-Prosecution Agreement Theft FNI Media Laser Anderson Attorneys\' Fees Credit Repair Martin ADR Bank Guarantee Advisor Placement Group Constitution Merrill Currency Merill Lynch GAP Money Market Evidence Finra Collateral NFA Hertz Compliance Officer Mary Jo White Regulation Non Solicitation Naskovets Motion To Dismiss S&P AIG Withdrawals CD Books And Records Brokeandbroker.com Quasi Governmental Leveraged ETFs Solomon Rule 9552 Death RRBDLAW Retired Woman With Cane Wires Tennis Court Bill Singer BrokeAndBroker Wire Transfers Elder Law BIll Singer Supervisor iPhone Compromise Merger Skimming Regulation S-P Sex Short Sale Payroll Bribe Chase Bank Permanent Bar Nietzsche Galleon 1Cir Excessive Trading Attorneys Fees Initials Public Interest Ethics AAA Customer Files Lawyers Taxes David Lerner Fiduciary Duty Pruco Disparate Treatment Reform Federal Reserve Countrywide Immunity Molchatsky Tran Stock Promotion Sexual Discrimination Turnover SIPC Selling Away Gabelli Privilege Rule 420 Koval Fee Fourth Amendment Excel Criminal Spoliation VXX Blank Forms 1099 Risk Proctor Mary Schapiro BrokeandBroker.com Trading Wanger Murray PIABA Falsification Schumer Rule 12504 Executrix Sharing Agreement Kenneth Starr Dow Stop Loss SEC Rules of Practice CMO EDNY Cybercrime false statements NML 9/11 Electronic Communications Tippee 9th Circuit Compliance Questionnaire Wells Fargo Advisors Customers Books and Records Obstruction Walter Newbridge Silver Tipper Diabetes Rule 13200 Cold Spring Advisory Group Mattera LLC Jennifer Tarr Father Kennedy Puts Enforcement Dinner Securities and Exchange Commission Mistake Elder Fraud Spam Martoma House Financial Services Altered Records Broy Google Constructive Discharge Settling Away Statute of Limitation Lewis Carroll Rules of Practice