FINRA Arbitrator Tosses Raymond James Case. Bloomberg's Susan Antilla Critiques SEC's Schapiro.

May 28, 2010


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Bill Singer Bloomberg TV Interview About Disney Information Scheme

Bill Singer Interview About Disney Information Scheme
May 26 (Bloomberg) -- Bill Singer, partner at Stark & Stark, talks with Bloomberg's Mark Crumpton about the arrest of an assistant to Walt Disney Co.'s head of corporate communications for leaking confidential information about the entertainment company's earnings. Federal prosecutors today charged Bonnie Hoxie, the assistant to Zenia Mucha, and Yonni Sebbag, Hoxie's boyfriend, with sending letters in March to at least 33 investment companies including hedge funds with offers to sell confidential information about Burbank, California-based Disney.



In Financial Industry Arbitration Authority (FINRA) arbitrations, as with many things in life, sometimes you win, sometimes you lose, and sometimes you are humiliated.  I think a fair reading of  In the Matter of the Arbitration Between Raymond James Financial Services, Inc., Claimant, versus Robert Mayfield, Respondent (FINRA Arbitration 09-06892, May 24, 2010) would put Claimant Raymond James' case in that humiliation category of things.


Regrettably, the facts of this case are a bit blurry.  In this member firm versus associated person dispute, Claimant Raymond James filed its Complaint  on December 10, 2009.  Claimant sought $19,354.03 in damages pursuant to causes of action for indemnification and reimbursement, and breach of contract. 


That's about as straightforward as this case will get. 


What were the salient facts in Raymond James' case against Mayfield? What was Claimant seeking indemnification for? What was Claimant seeking reimbursement for? What breach of contract occurred?  I have absolutely no idea.


The FINRA decision states that the parties signed a "Sales Agreement" on July 30, 2001. Then things get a tad puzzling.  Apparently, there was an underlying action by the name of Roy Lee Hanna et al. v. Raymond James, et al. that may have been filed in 2004 and may have been settled.  What does that Hanna case have to do with this one? We are not told. Why is that Hanna case called an "underlying action?" Again, that's unclear.


What we do know is that William J. Petzel, the sole FINRA Arbitrator who heard this case, was not enthralled with Claimant Raymond James' case.  For starters, Arbitrator Petzel's says that "Claimant's brief is remarkable for its lack of dates."  In terms of dramatic foreshadowing, that ain't good news for Claimant. Moreover, the Arbitrator notes that he can only discern dated references to the 2001 execution of the Sales Agreement and to some generally referenced events in 2003, the more recent year involved a request by someone for indemnification of $5,765.69 for something.  Pointedly, the Arbitrator concludes that "One must assume that the lack of dates is intentional."  Ouch!


Although the recitation of the facts in this arbitration are sketchy - which may have more to do with Claimant Raymond James' pleading than the Arbitrator's efforts - the Arbitrator does explain his decision to dismiss the Claimant's case in fairly stark and refreshingly blunt language:


The FINRA Rule as to "Time Limitation on Submission of Claims" is quite clear.  "No claim shall be eligible for submission to arbitration or the Code where six years have elapsed from the occurrence or event giving rise to the claim."  The only dates in the "Statement of Claim" that suggest and "occurrence" are "July 2003 through August 2003" and July 21, 2003 to August 19, 2003.  As the "Statement of Claim" was filed on December 2009, simple arithmetic shows that more than six years have passed for those claims."


The Answer of Respondent asserts a Statute of Limitations defense. There is nothing in the "Statement of Claim" of Claimant that negates that defense.  In fact, the lack of dates implies knowledge of a Statute of Limitations problem. Respondent prevails. Claimant is to receive nothing.



This Wall Street Lady Enforcer Shoots Blanks: by Susan Antilla

Bloomberg columnist Susan Antilla takes the gloves off and comes out punching on behalf of Wall Street reform and investors' rights. She is not happy with the public relations spin that she sees in too many press stories about the crop crop of industry regulators.  Antilla will have none of it. She cites to the record and warns us all against buying the re-sold bill of goods:

[S]o there you have it. As Schapiro rose to the top, Ponzi schemes were cooking, unhappy investors were given no choice but to bring their complaints to private Wall Street courts, and hapless examiners didn't Google before an inspection.

. . .

She makes the right moves when she first gets called in a crisis. But if your portfolio gets robbed, don't count on this sheriff to draw her gun on your behalf if public attention has already moved on.

Read Susan Antilla's Full Column at: 


Wall Street Blackjack Player Busts, Busted, and Barred

Not prepared to tolerate a dastardly, hardcore card-shark in its midst, FINRA pursued Pierce for violating Rule 2110. Pursuant to a FINRA Letter of Acceptance, Waiver and Consent ("AWC") (AWC #2008015405101, March 9, 2010) Pierce offered to settle the regulatory case against him, without admitting or denying the findings. Notably, only the alleged blackjack scheme is referenced by FINRA; there is not a single reference to any alleged criminal charge, plea, or final disposition as providing the basis for jurisdiction. Frankly, that's what caught my eye about this case. FINRA was going after this kid not based upon any criminal conviction (there is none) but simply because he allegedly rigged a blackjack game.

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