Pointedly, Plaintiffs asserted that the SEC had missed many opportunities to timely uncover the Madoff Ponzi fraud because of the SEC’s:
On April 10, 2013, the United States Court of Appeals for the Second Circuit (“2nd Circuit”) found that the United States was effectively shielded from this lawsuit because the SEC retained complete discretion over when, whether and to what extent to investigate and bring an action against an individual or entity. The SEC's cited misconduct was similarly immunized from civil suit because the federal securities regulator was engaged in the allocation of time and resources based upon somewhat appropriate economic, social and policy considerations.
Although the 2nd Circuit concluded that Plaintiffs’ harm ultimately stemmed from the SEC’s failure to investigate Madoff and uncover his Ponzi scheme, the appellate court affirmed the dismissal by the District Court for the Southern District of New York. Notwithstanding that ruling, the 2nd Circuit expressed its compassion for plaintiffs and its anger with the SEC’s desultory conduct, as evidenced by this comment:
Despite our sympathy for Plaintiffs’ predicament (and our antipathy for the SEC’s conduct), Congress’s intent to shield regulatory agencies’ discretionary use of specific investigative powers via the DFE is fatal to Plaintiffs’ claims.
The Gabelli Countdown
As noted in “Supreme Court Reverses SEC v. Gabelli On Discovery Rule Grounds” (BrokeAndBroker.com, February 27, 2013), statute of limitations concerns in SEC cases became all the more pressing last year given the United States Supreme Court’s Opinion in Gabelli et al. v. Securities And Exchange Commission (568 U. S. ____ (2013), February 27, 2013). In Gabelli, the Court considered an enforcement action brought by the SEC under the Investment Adviser Act in April 2008, when the SEC filed a Complaint seeking civil penalties arising from allegations of illegal activity up to August 2002. The Investment Advisers Act makes it illegal for investment advisers to defraud their clients, and authorizes the SEC to seek civil penalties; however, under the general statute of limitations for civil penalty actions, the SEC has only five years to seek such penalties. In this case, the courts were faced with deciding whether the five-year clock begins to tick when the fraud is complete or when the fraud is discovered.
In 2008, the SEC brought the underlying civil enforcement action against Marc J. Gabelli, the portfolio manager of the mutual fund Gabelli Global Growth Fund (“GGGF” or the “Fund”), and Bruce Alpert, the chief operating officer for the Fund’s adviser, Gabelli Funds, LLC (“Gabelli Funds” or the “Adviser”) alleging that from 1999 until 2002 Alpert and Gabelli allowed one GGGF investor—Headstart Advisers, Ltd.—to engage in“market timing” in the fund. According to the SEC, Gabelli and Alpert did not disclose Headstart’s market timing or the quid pro quo agreement, and, instead, banned others from engaging in market timing and made statements indicating that the practice would not be tolerated. In noting the impact of such disparate treatment, the Complaint asserted that during the relevant period, Headstart earned rates of return of up to 185%, while “the rate of return for long-term investors in GGGF was no more than negative 24.1 percent.”
On August 17, 2010, the District Court dismissed the SEC’s Complaint against Gabelli and Alpert as time barred. On August 1, 2011, the Second Circuit reversed accepting the SEC’s argument that because the underlying violations sounded in fraud, the Discovery Rule applied and, accordingly, the statute of limitations did not begin to run until the SEC discovered or reasonably could have discovered the fraud. SEC v. Gabelli (2nd Circuit, 653 F. 3d 49, August 1, 2011).
On appeal, the United States Supreme Court noted that it had never applied the Discovery Rule in a matter where the plaintiff is the government bringing an enforcement action for civil penalties, in contradistinction to a defrauded victim seeking recompense. In declining to extend the Discovery Rule to government civil penalty enforcement actions, the Supreme Court cast the government as a unique plaintiff often tasked with rooting out fraud and armed with many arrows in its quiver just for such an undertaking.
Viewing the Discovery Rule as something of an equalizer designed to assist wronged parties seeking recompense, the Supreme Court was not compelled to offer such assistance to regulators seeking not compensation but punishment aimed at wrongdoers. Further, the Supreme Court deemed that there were many motivating factors to avoid having courts attempt to parse through what the government knew or reasonably should have known about an alleged fraud. Accordingly, the Supreme Court reversed and remanded SEC v. Gabelli (2nd Circuit, 653 F. 3d 49, August 1, 2011). In Gabelli, the the Supreme Court noted, in part:
There are good reasons why the fraud discovery rule has not been extended to Government enforcement actions for civil penalties. The discovery rule exists in part to preserve the claims of victims who do not know they are injured and who reasonably do not inquire as to any injury. Usually when a private party is injured, he is immediately aware of that injury and put on notice that his time to sue is running. But when the injury is self-concealing, private parties may be unaware that they have been harmed. Most of us do not live in a state of constant investigation; absent any reason to think we have been injured, we do not typically spend our days looking for evidence that we were lied to or defrauded. And the law does not require that we do so. Instead, courts have developed the discovery rule, providing that the statute of limitations in fraud cases should typically begin to run only when the injury is or reasonably could have been discovered.
The same conclusion does not follow for the Government in the context of enforcement actions for civil penalties. The SEC, for example, is not like an individual victim who relies on apparent injury to learn of a wrong. Rather, a central “mission” of the Commission is to “investigat[e] potential violations of the federal securities laws.” SEC, Enforcement Manual 1 (2012). Unlike the private party who has no reason to suspect fraud, the SEC’s very purpose is to root it out, and it has many legal tools at hand to aid in that pursuit. It can demand that securities brokers and dealers submit detailed trading information. Id., at 44. It can require investment advisers to turn over their comprehensive books and records at any time. 15 U. S. C. §80b–4 (2006 ed. and Supp. V). And even without filing suit, it can subpoena any documents and witnesses it deems relevant or material to an investigation. See §§77s(c), 78u(b), 80a–41(b), 80b–9(b) (2006 ed.).
The SEC is also authorized to pay monetary awards to whistleblowers, who provide information relating to violations of the securities laws. §78u–6 (2006 ed., Supp. V). In addition, the SEC may offer “cooperation agreements” to violators to procure information about others in exchange for more lenient treatment. See Enforcement Manual, at 119–137. Charged with this mission and armed with these weapons, the SEC as enforcer is a far cry from the defrauded victim the discovery rule evolved to protect. . .
Page 7 – 8 of the Opinion.
NY Times Morgenson Warns Of Ticking Clock
Nearly a year ago, following Molchatsky and Gabelli, New York Times reporter Gretchen Morgenson raised her concern about a number of matters then on the SEC’s plate that were nearing the expiration of their five-year statute of limitations – particularly involving cases arising from the mortgage bust of 2008. "Note to New S.E.C. Chief: The Clock Is Ticking” (New York Times, “Fair Game,” April 13, 2013).
Morgenson’s 2013 column warned about a then pending SEC whistleblower complaint involving tens of billions of dollars in transactions that may have been furthered by potentially misleading disclosures by SunTrust Bank, a regional bank holding company in Atlanta. Pointedly she asserted in her 2013 column that the matter was
[F]iled with the S.E.C. more than a year ago by a former SunTrust employee, it appears to be languishing even though time’s a-wasting.
The SunTrust whistle-blower complaint, which I reviewed, contends that company financial filings of recent years misrepresented the bank’s exposure to risky no-documentation mortgages that it underwrote from 2006 to 2008. Many were sold to Fannie Mae and Freddie Mac, the taxpayer-backed mortgage finance giants.
Shareholders have not been aware, the complaint says, that many mortgages SunTrust was selling to Fannie and Freddie in this period were so-called liar loans, with little to no documentation of borrowers’ income or assets. The bank maintained that it had little exposure to low-documentation loans, the complaint says.
As with many whistle-blower complaints, the person filing this matter asked not to be identified. Aegis J. Frumento, a lawyer at Stern Tannenbaum & Bell who represents the whistle-blower, said the plaintiff is an experienced mortgage underwriter at SunTrust who was disturbed by dubious practices at the bank. . .
One Year Later
Morgenson has just reported in "A Whistle That’s Lost In The Crowd" (New York Times, "Business Day," March 8, 2014) that although the Department of Justice is investigating mortgages that SunTrust underwrote and sold to Fannie Mae and Freddie Mac, the SEC whistleblower complaint “seemed to be languishing at the Securities and Exchange Commission since its submission in early 2012.”
Although one wouldn’t think that a whistleblower would suffer depending upon which agency runs with the ball that he passed, commonsense is often a casualty when it comes to federal regulatory organizations and prosecutors. As Morgenson warns:
[W]hat if the S.E.C. doesn’t bring a successful case based on a whistle-blower’s complaint but another law enforcement agency does, using the same information?
The answer appears to be this: The whistle-blower may get no award at all.
The rules of the S.E.C. program state that whistle-blower complaints brought to the agency can be shared with other law enforcers. That makes sense, especially if a matter involves potential criminal activity that the S.E.C. cannot pursue or if the facts outlined in a complaint fall outside the commission’s enforcement mandate.
But the S.E.C. rules also state that a whistle-blower can receive an award only if the commission brings a successful case based on the information; success is defined as generating sanctions of more than $1 million. If another agency uses the complaint to generate fines and penalties but the S.E.C. declines to pursue it, the whistle-blower would appear to be out of luck under the S.E.C.’s program. . .
The Quagmire Of Related Actions
As set forth in § 240.21F-3: Payment of awards.
(a) Commission actions: Subject to the eligibility requirements described in §§240.21F-2, 240.21F-8, and 240.21F-16 of this chapter, the Commission will pay an award or awards to one or more whistleblowers who:
(1) Voluntarily provide the Commission
(2) With original information
(3) That leads to the successful enforcement by the Commission of a federal court or administrative action
(4) In which the Commission obtains monetary sanctions totaling more than
$1,000,000. The terms voluntarily, original information, leads to successful enforcement, action, and monetary sanctions are defined in § 240.21F-4 of this chapter.
(b) Related actions: The Commission will also pay an award based on amounts collected in certain related actions.
(1) A related action is a judicial or administrative action that is brought by:
(i) The Attorney General of the United States;
(ii) An appropriate regulatory authority;
(iii) A self-regulatory organization; or
(iv) A state attorney general in a criminal case, and is based on the same original information that the whistleblower voluntarily provided to the Commission, and that led the Commission to obtain monetary sanctions totaling more than $1,000,000.
The terms appropriate regulatory authority and self-regulatory organization are defined in § 240.21F-4 of this chapter.
(2) In order for the Commission to make an award in connection with a related action, the Commission must determine that the same original information that the whistleblower gave to the Commission also led to the successful enforcement of the related action under the same criteria described in these rules for awards made in connection with Commission actions. The Commission may seek assistance and confirmation from the authority bringing the related action in making this determination. . .
In the absence of the SEC "anchoring" the matter in-house via the filing of its own action, a separate Department of Justice ("DOJ") action may not be deemed a "related" action under Dodd Frank but could, in fact, be deemed a separate and unrelated action? As a consequence, if a whistleblower provided original information to the SEC that was subsequently passed on to DOJ (or another regulator/prosecutor) and that information resulted in a successful prosecution by DOJ (or an enforcement action by another regulator) but the SEC did not initiate its own action, then the whistleblower may well be left out in the cold.
In the Matter of the Claim for Related Action Award in connection with
United States v. Andrey C. Hicks, 1:11-cr-10407-PBS (D. Mass. 2011) (Related Action)
SEC v. Andrey C. Hicks and Locust Offshore Management, LLC, 1:11-cv-11888-RGS (D. Mass. 2011) (SEC Action)
Note that the SEC's Order caption specifically characterizes the criminal action as the "related action" and the SEC's civil action as the "SEC Action." All of which strongly suggests that there cannot be any "related" action in the absence of an anchored and separate "SEC Action."
Bait And Switch
With the advent of 2014, the SEC was on notice of the consequences of Gabelli; namely, that, times' a tickin' and the federal regulator doesn't have the luxury of dawdling as the final seconds run off before a given statute of limitations is lost. Similarly, as admonished in Molchatsky, there were lessons for the SEC to learn from its disgraceful handling of tips about Madoff and from the organization’s plodding response. The SEC is not entitled to dawdle until such time as the statutes of limitation have expired and the lights are turned out on any justified prosecution. One Harry Markopolous was more than enough for this generation.
Notwithstanding Morgenson's columns and their concerns, SunTrust may or may not be guilty of whatever allegations have been presented by whistleblowers and possibly uncovered by the SEC’s staff — as such, the bank is entitled to the presumption of innocence. On the other hand, the investing public and SunTrust shareholders are similarly entitled to timely regulation and enforcement.
As uneasily set forth in Morgenson's recent column, the much heralded Dodd Frank whistleblower initiative seems to be taking on the trappings of an unseemly "bait and switch." The goal should be to get timely, substantive tips that will either prevent fraud or bring about its quicker demise. And let's not be disingenuous here: The prospect of getting millions of dollars in whistleblower bounties may be the sole motivation for most folks coming forward with tips. Short-changing whistleblowers by shifting an action from one regulator/prosecutor to another is just not going to further the goals of the program. What we shouldn't be worrying about is the silliness of turf wars seeking credit for developing the tips at the expense of rewarding those who came forward with the information.
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Wall Street ain't always a happy place when it comes to labor relations. You got hundreds of thousands of registered persons lacking union representation (for better or worse) or even an effective trade group. Worse, FINRA, the so-called industry's self-regulatory organization, is essentially run on the revenues from its member firms, which have the exclusive vote franchise in all the regulator's elections and rulemaking. In the end, Wall Street's registered persons are confronted by financially powerful and politically connected employers, bereft of their own membership organization, and forced to deal with what looks like a biased regulator that runs the arbitration forum where industry disputes must be litigated. Today's BrokeAndBroker Blog examines a somewhat typical employment dispute.
In a Financial Industry Regulatory Authority (“FINRA”) Arbitration Statement of Claim filed in December 2012, Claimant Ramsey asserted violations of New York Labor Law, failure to pay overtime, failure to provide claimant with notice, retaliation against claimant, and failure to pay wages. In addition to costs, interest and attorneys’ fees, Claimant Ramsey sought the following additional damages per cause of action:
- NYL Law: $13,817.25 compensatory damages, liquidated damages in an amount equal to 100% of such actual damages;
- Overtime: $1,500.00 compensatory damages;
- Notice: $2,500.00 compensatory damages, interest,
- Retaliation: lost back pay, front pay in lieu of reinstatement, lost compensation and damages, and liquidated damages in an amount of not more than $10,000.00;
- Unpaid wages: as determined by the Arbitrator.
In the Matter of the FINRA Arbitration Between Benjamin Scott Ramsey, Claimant, vs. Nyppex, LLC, ACP Investment Group, LLC, and Laurence Geoffrey Allen, Respondents (FINRA Arbitration 12-04283, February 25, 2014).
Respondents generally denied the allegations and asserted various affirmative defenses.
The FINRA Arbitration Panel found Respondents jointly and severally liable and ordered them to pay to Claimant Ramsey:
Additionally, the Panel found Respondents jointly and severally liable for payment to Claimant of $48,027 in attorneys’ fees pursuant to the Fair Labor Standards Act of 1938, Section 16(b), 29 U.S.C.A. Section 216(b). Finally, the Respondents were ordered to pay to Claimant $809.05 in costs.
- NYL Law: $3,658.26 plus 9% per annum interest from March 1, 2012 until paid in full; and $3,658.26 in liquidated damages;
- Overtime and Notice: $4,150 compensatory damages;
- Unpaid Wages: $855.77 liquidated damages plus interest in the amount of $38.51 for a total amount of $894.28.
29 U.S. Code § 216 - Penalties
(b) Damages; right of action; attorney’s fees and costs; termination of right of actionAny employer who violates the provisions of section 206 or section 207 of this title shall be liable to the employee or employees affected in the amount of their unpaid minimum wages, or their unpaid overtime compensation, as the case may be, and in an additional equal amount as liquidated damages. . . in addition to any judgment awarded to the plaintiff or plaintiffs, allow a reasonable attorney’s fee to be paid by the defendant, and costs of the action. . .
Bill Singer's Comment
What can I say? Not much. Claimant Ramsey alleged all sorts of workplace horrors: labor law violations, unpaid overtime, unpaid wages and retaliation. Sounds more like the stuff of Norma Rae than Wall Street. Note that Claimant Ramsey won, and did so decisively.
Ah, but then comes the whole closing of the ranks thing that makes mandatory intra-industry arbitration so unpalatable for me. How convenient that the FINRA Arbitration Decision is so short on disclosure. We don't really know jack about anything that went on between the parties. We aren't offered a clue as to specifics and why this Panel found in the employee's favor. Why is that? Why has darkness descended over this lawsuit in a way that would rarely, if ever, occur in the civil courts? Why is so much of FINRA's intra-industry arbitration docket shrouded in shadows?
One conspiracy theory, to which I whole-heartedly ascribe, is that this is exactly what the industry wants, and with an overly compliant self-regulator, this is exactly what the industry gets. This is why we have mandatory arbitration involving labor disputes. This is why so much of what really goes on in the branches and trading desks remains hermetically sealed from the prying eyes of the public.
How lovely and convenient for the powerful FINRA member firms that they get to force their employees and customers to give up their right to litigate in the courts and compel them to arbitrate in a forum operated by FINRA, where, as I noted above, not one of the customers or employees has a single vote on anything, in contradistinction to where the member firms have a vote on everything.
No, I am not a fan or proponent of mandatory arbitration. It stinks when this unfair bargain is forced upon public customers. It stinks, just as badly, when it's forced upon industry registered persons. And the byproduct of all this forced dispute resolution is far too much secrecy and non-disclosure that always seems to further the best interests of FINRA's largest member firms to the detriment of the individual men and women who work at those firms and to the detriment of public customers who feel defrauded by those firms. If you really believe that arbitration is freely bargained for, do me a favor, try and open a brokerage account after you crossed out the arbitration clause -- and if you're seeking employment, let me know how that also goes when you decline to be subject to the intra-industry dispute resolution provisions.
FINRA Code of Arbitration Procedure
13200. Required Arbitration
Except as otherwise provided in the Code, a dispute must be arbitrated under the Code if the dispute arises out of the business activities of a member or an associated person and is between or among:
• Members and Associated Persons; or
Disputes arising out of the insurance business activities of a member that is also an insurance company are not required to be arbitrated under the Code.
13201. Statutory Employment Discrimination Claims and Disputes Arising Under a Whistleblower Statute that Prohibits the Use of Predispute Arbitration Agreements
(a) Statutory Employment Discrimination Claims
A claim alleging employment discrimination, including sexual harassment, in violation of a statute, is not required to be arbitrated under the Code. Such a claim may be arbitrated only if the parties have agreed to arbitrate it, either before or after the dispute arose. If the parties agree to arbitrate such a claim, the claim will be administered under Rule 13802.
(b) Disputes Arising Under a Whistleblower Statute that Prohibits the Use of Predispute Arbitration Agreements
A dispute arising under a whistleblower statute that prohibits the use of predispute arbitration agreements is not required to be arbitrated under the Code. Such a dispute may be arbitrated only if the parties have agreed to arbitrate it after the dispute arose.
15A. INDIVIDUAL/APPLICANT'S ACKNOWLEDGEMENT AND CONSENT
5. I agree to arbitrate any dispute, claim or controversy that may arise between me and my firm, or a customer, or any other person, that is required to be arbitrated under the rules, constitutions, or by-laws of the SROs indicated in Section 4 (SRO REGISTRATION) as may be amended from time to time and that any arbitration award rendered against me may be entered as a judgment in any court of competent jurisdiction.
As with many lawsuits involving pro se parties, things don’t always go smoothly. Folks represent themselves for many reasons. Often it’s because they simply cannot afford a lawyer. Other times, the pro se party despises lawyers and figures that she or he can do a better job. Whatever the reason, the participation of a self-represented party often challenges the trier of fact, adversaries, and witnesses. The FINRA arbitration discussed in today's BrokeAndBroker Blog seems to confirm that axiom
In a Financial Industry Regulatory Authority (“FINRA”) Arbitration Statement of Claim filed in November 2012 and as thereafter amended, public customer Claimant Poling, representing himself pro se, asserted breaches of contract and fiduciary, negligence, and fraud in connection with his investments in KBS Legacy Partners Apartment REIT, Inc., Griffin Capital Net Lease REIT, Inc. and Steadfast Income REIT, Inc. Ultimately, Claimant Poling sought rescission of the REIT purchases; $50,000 in compensatory damages; return of $90,000; and a refund of commissions. In the Matter of the FINRA Arbitration Between Stanley Bruce Poling, Claimant, vs. Centaurus Financial, Inc., Gregory Scott Kinkead, and Kinkead Wealth Management, Respondents (FINRA Arbitration 12-04001, February 27, 2014).
Respondent Cenaturus, Kinkead Wealth Management, and Kinkead generally denied the allegations, asserted various affirmative defenses, and sought an expungement of the matter from Respondent Kinkead’s Central Registration Depository records ("CRD").
In keeping with how FINRA arbitrations tend to roll-out, an initial Pre-Hearing Conference Scheduling Order instructed the parties to exchange all applicable documents outlined in the FINRA Discovery Guide by July 31, 2013. For unexplained reasons, Claimant Poling apparently opted not to comply with this Order.
We Can't Work It Out
On August 19, 2013, following the parties’ failure to agree on terms for a Confidentiality Order and Motion for Protective Order, Claimant Poling requested a pre-hearing conference (“PHC”) with the sole FINRA arbitrator. In response, an August 29, 2013, Order requested that the Claimant and Respondents confer and agree on terms for the proposed confidentiality and protective order.
On September 4, 2013, the Respondents submitted a response in opposition to Claimant’s August 19th request; and, thereafter, on September 17, 2013, the Respondents submitted a Motion to Compel and for Sanctions, to which Claimant Poling did not respond.
Can I Take Your Order(s)?
I am not going to engage in conjecture as to why Claimant Poling purportedly failed to comply with the initial Discovery order and, thereafter, failed to respond to Respondents' motion to compel his cooperation in Discovery and to sanction him for his prior non-cooperation. There are often many reasons given for trench warfare during Discovery. Suffice it to say, arbitrators rarely enjoy such hostilities and if a party's conduct is viewed as unwarranted posturing, that negative impression could well impact the outcome of the case and the amount of damages awarded.
On September 17, 2013, an Order was issued requiring Claimant Poling to submit records within ten days.
For whatever his reasons, Claimant Poling was not disposed to comply with the September 17th Order' and, thereafter, the FINRA Arbitrator issued an Order dated October 16, 2013, for $300 in sanctions against Claimant payable to Respondents.
On October 22, 2013, Claimant Poling submitted a Request that the Arbitrator Reconsider Sanctions, which Respondents opposed. On November 5, 2013, Claimant filed his own Motion for Sanctions, which Respondents opposed. After a November 11, 2013, PHC, Claimant’s Request and Motion were denied.
Among other matters handled during the November 11th PHC, Respondents submitted a Motion to Dismiss Based on Discovery Abuse, but consideration of that motion was deferred until the first evidentiary hearing
On December 9, 2013, prior to the start of the evidentiary hearing, the Arbitrator heard oral argument on Respondents' Motion to Dismiss Based on Discovery Abuse, which the Arbitrator denied; however, the Decision explains that:
In its place, the Arbitrator imposed an adverse inference in the form of a heightened standard of proof for Claimant. Ultimately, Claimant failed to prove his case even under a normal preponderance of the evidence standard.
The FINRA Arbitrator denied Claimant Poling’s claims in their entirety and found him liable and ordered him to pay to Respondents $1,000 as a sanction of discovery abuse (in addition to the prior $300 sanction that was paid). Additionally, the Arbitrator recommended the expungement of the matter from Respondent Kinkead’s CRD based on a finding that:
Claimant lacked any credibility and his claim was false when considered against the testimony and evidence presented.
Bill Singer's Comment
Would a lawyer have made a difference for Claimant Poling? Hard to say --- what is likely, is that a lawyer would have increased Claimant's costs in the form of legal fees. Maybe this was simply a flawed case that even the finest lawyer could not have pulled out a victory. On the other hand, maybe this case was mishandled by a public customer who represented himself and, in exacerbating things, he prompted an arbitrator to tack on sanctions for discovery abuses. We don't know. All we can do is guess.
An interesting and unusual aspect of this case was that the FINRA Arbitrator "imposed an adverse inference in the form of a heightened standard of proof for Claimant." Frankly, I'm not exactly sure what that means; and, more to the point, I'm not exactly sure that such a act will survive an appeal (which may or may not occur here). On what basis did the FINRA arbitrator arrogate to himself the prerogative to enhance the legal standard of proof in an arbitration? Assuming that the standard of proof was a "preponderance of the evidence," to what, exactly, was that standard raised . . . "beyond a reasonable doubt?" As noted in the Decision, however, the FINRA Arbitrator found that Claimant Poling had not satisfied the preponderance standard, and such a disclosure may well appeal-proof the case. Notwithstanding, it may have be appropriate for the Decision to specify exactly what constituted the so-called heightened standard and the legal basis on which it was premised.
I also took note of the FINRA Arbitrator's stark language when he found that Claimant Poling "lacked any credibility." Now that's one hell of a hurdle for any party to overcome in litigation. Beyond the credibility factor, the FINRA Arbitrator concluded that Poling's claim were false. Wow . . . not only is Claimant found lacking in credibility but his case is found to have been premised on falsehood. Not exactly a winning combination as the outcome here demonstrated.