Today's BrokeAndBroker.com Blog considers the lawsuit of a registered rep who handled his own expungement arbitration against his former employer J.P. Morgan Securities. Sometimes these pro se cases go well. Sometimes they just go off the rails. Regardless of the outcome, the self-represented party often takes some satisfaction in knowing that he did it "My Way." He may not have won his case but he did get to end his lawsuit humming one helluva pop tune.
Case In Point
In a Financial Industry Regulatory Authority ("FINRA") Arbitration Statement of Claim filed in February 2017, Claimant Storm, representing himself pro so, asserted compensation; libel or slander on
his Form U5; wrongful termination; and libel, slander or defamation. In addition to unspecified damages and monetary relief, Claimant sought the expungement of the "Termination Comment" from his Form
U5. The claims arose in connection with Respondent J.P. Morgan Securities' termination of Claimant based upon allegations that Claimant had maintained two incomplete client-signed
account documents which he photocopied in order to purportedly complete an account transfer. In the Matter of the FINRA Arbitration Between John Gregory Storm, Claimant, vs. J.P. Morgan Securities, LLC, Respondent(FINRA Arbitration 17-00308, March 12, 2018).
Respondent J.P. Morgan generally denied the allegations and asserted various affirmative defenses.
In February 2018, Respondent moved to compel further responses and document production from Claimant, who did not respond. Thereafter, the FINRA Arbitration Panel granted Respondent's motion and ordered Claimant to fully and completely respond.
In March 2018, Respondent moved for discovery sanctions and sought a dismissal with prejudice. Following Claimant's response, the FINRA Arbitration Panel denied the motion without prejudice and advised Claimant that his supplemental discovery responses were not compliant with the Panel's order and deemed "seriously deficient." Pointedly, Claimant had not provided requested detailed information requested about his anticipated witnesses, had not provided documents referred to in his responses, and failed to submit a list of witnesses by a deadline date. Although the arbitrators extended Claimant's time to comply with its orders, they admonished hims as to the consequences of his continued failure to comply with the Panel's order, as noted in the FINRA Arbitration Decision:
Because of these deficiencies, Claimant is risking an order limiting, or totally precluding, his ability to present evidence at the hearing to support his claim. The Panel understands that Claimant has not had any legal training, but neither the Panel nor Respondent has any obligation to provide legal counsel to Claimant.
In response to Respondent's renewed motion for discovery sanctions, Claimant did not respond. Thereafter, the Panel entertained Respondent's motion during the hearing and took it under advisement but ultimately denied it.
At the conclusion of Claimant's case-in-chief, Claimant withdrew his claim for wrongful termination and his requests for monetary relief in relation to all claims, including compensatory and punitive damages.
After denying Respondent's motion for a directed verdict, the FINRA Arbitration Panel denied Claimant's claims.
Bill Singer's Comment
The schizophrenic nature by which arbitrators respond to pro se parties is clearly presented in today's case. On the one hand, the arbitrators seem to have bent over backwards (and then some) to accommodate Claimant Storm. On the other hand, when the arbitrators perceived that they had extended all the courtesies appropriate before crossing over the line of potential bias, they issued this stark admonition: The Panel understands that Claimant has not had any legal training, but neither the Panel nor Respondent has any obligation to provide legal counsel to Claimant.
Frankly, I'm a bit puzzled as to why Claimant Storm even filed his case. My sense of the underlying facts suggest that his former firm likely provided a fair narrative of the reason for his termination. I'm not suggesting that Storm should not have attempted to secure some amendment or revision of the disclosure on his industry record but, at some point, the facts speak for themselves and you have to sleep in the bed you made. Online FINRA BrokerCheck records as of April 17, 2017, disclose that Claimant Storm was first registered in June 2012 and after stints with Merrill Lynch, Pierce, Fenner & Smith Inc. and Morgan Stanley, by April 2016, registered with J.P. Morgan Securities LLC. Under the BrokerCheck heading "Employment Separation After Allegations," J.P. Morgan Securities indicated that it had "discharged" Storm based upon allegations that:
REGISTERED REP ADMITTED TO MAINTAINING TWO INCOMPLETE CLIENT-SIGNED ACCOUNT DOCUMENTS AND USING A PHOTOCOPIED INCOMPLETE CLIENT-SIGNED DOCUMENT TO COMPLETE AN ACCOUNT TRANSFER. REGISTERED REP STATED HE DID SO FOR THE CONVENIENCE OF THE CLIENTS.
It may well be that Storm fully disputes that above narrative posted on his record by J. P. Morgan Securities. For starters, he probably should have submitted a "Broker Statement" to set forth his version of the underlying allegations. If, for example, he denies that he had admitted to the maintenance and use of incomplete pre-signed documents, then he should have noted as much. Further, if he denies that he "stated he did so for the convenience of the clients," then he should assert that he never gave such a statement. If Storm maintained and used the cited document(s) as alleged, then he never stood much of a chance in obtaining an expungement of those allegations. Further, if he gave a statement acknowledging his misconduct but attributed his actions to a misplaced desire to further his clients' convenience, then he was doomed from the start.