July 28, 2018
There are many magic moments in our lives. In FINRA arbitrations, not so many, but, that's not to say that even in the midst of a heated customer dispute we can't find magic. In a recent FINRA arbitration we start with four respondents, and then, almost magically, we end with one. We have a lawyer who says he has unrevoked authority to accept service on behalf of a respondent broker-dealer, but that firm lacks a physical address and the lawyer eventually withdraws as counsel for that apparently no-longer-existing client. Then we got named respondents who get dismissed. One named respondent files for bankruptcy. Then the whole mess ends with an award against the sole remaining respondent -- the brokerage firm that didn't appear at the hearing, whose maybe/maybe-not lawyer withdrew as its counsel, and which lacks a mailing address after it was apparently evicted. Who says their ain't no magic in this world? Why this arbitration is filled with many, many magical moments.
You enter into an agreement to do something. You think you did it. The other party to the agreement may think that you didn't. Such is the simple setting of the stage for a lawsuit. In today's BrokeAndBroker.com Blog, we have a FINRA arbitration in which an associated person apparently believes that he raised money for a customer and is entitled to a commission in the form of cash and units. Since the matter is being litigated, the customer apparently saw things differently. The fascinating aspect of the dispute is that it presents us with the oddity of a FINRA arbitration in which an associated person is suing a customer -- as much a man bites dog story as exists on Wall Street. That being said, we're going to need a pooper-scooper by the time we've finished reading the FINRA Arbitration Decision.
FINRA Arbitrators Slam Wells Fargo With $8.5 Million Puerto Rico Bond Award (BrokeAndBroker.com Blog)
Today, we got a FINRA arbitration panel awarding public customers nearly $8.5 million in damages, costs, and fees. Including punitive damages. Including discovery abuse sanctions. And the Respondent is Wells Fargo Advisors. BrokeAndBroker.com Blog publisher Bill Singer wonders if the industry self-regulatory-organization, the Financial Industry Regulatory Authority, will take any regulatory action against its large member firm. Then again, Bill is a fellow with such an active imagination.
BrokeAndBroker.com Blog publisher Bill Singer is often tough (if not impossible) to please when it comes to the decisions, opinions, orders, memoranda, and what-not that endlessly spews from Wall Street's regulatory community and from those who adjudicate its disputes. As Bill often laments, in the apparent haste to churn the crap out, those tasked with drafting the necessary documents tend to do so without much concern about the adequacy of the content and context. Consequently, we often find ourselves reading published materials from courts, regulators, and arbitrators that fail to intelligibly explain who did what to whom, and why a finding was made or a sanction imposed. To Bill's surprise and immense satisfaction, today's featured FINRA Arbitration Decision is perfection. Perfection? Seriously?? Bill Singer is using the word "perfection" when it comes to something emanating from the dark recesses of FINRA? Yeah . . . he said it: Perfection!
UPDATE:Non-Attorney Representatives Involved In FINRA Arbitration Blight (BrokeAndBroker.com Blog)
No . . . the issue of non-attorney representatives is not amenable to a simple or quick solution. Corporations may often find it cost-effective and expedient to send a non-lawyer officer to represent the entity during many non-judicial events such as mediation or arbitration. Similarly, competent non-lawyer representatives may offer an affordable and effective alternative for many customers and associated person. And what are we to do about pro se parties and those represented by non-profit organizations such a public interest advocates or law school clinics? On the other hand, how much more discussion and debate is needed about those issues? At some point you fish or cut bait. Just like you enter an order to buy or not . . . or to sell or not. No one ever said making a decision was easy.