In a Consolidated FINRA Intra-Industry Employment Case, Arbitrators Blast Both Parties

August 2, 2011

First, you have a pro se litigant. Second, you have a lot of obvious bad blood between the parties. Third, you have an unending list of allegations and claims. All of which combine to create an eye-roller of a FINRA Arbitration - an over-the-top battle. 


In a Financial Industry Regulatory Authority ("FINRA") Arbitration Statement of Claim filed in October 2008 and thereafter amended, Claimant Synergy alleged that Respondent Coleman had engaged in a breach of contract.  Respondent generally denied the allegations and asserted various affirmative defenses. In the Matter of the FINRA Arbitration Between Synergy Investment Group, LLC, Claimant vs. Baruch Coleman, Respondent (FINRA Arbitration 08-03738, July 25, 2011).

Among the damages requested by Claimant Synergy were $798,734.30 in compensatory damages.  Coleman apparently sought $14.1 Million in compensatory damages.  


In a FINRA Arbitration Statement of Claim filed in February 2009, Claimant Coleman asserted numerous causes of action including RICO, fraud, breach of contract, defamation, and intentional infliction of emotional distress.  Baruch Coleman, vs. Synergy Investment Group, LLC, Vision Trek, LLC, The Synergy Holding Group, Inc., Joseph Christopher Palladino, Eric Christopher Sides, Timothy John Bain, Mark Christopher Wesley, Burton Troy Medlin, and Jeffrey Dean Jones, Respondents (FINRA Arbitration 09-00902, July 25, 2011).

Among the measures of relief that Claimant Coleman sought was declaratory and injunctive relief to prevent Respondents from withholding Claimant's earned compensation and to correct the errors arising from improper U5 disclosures. Respondents generally denied the allegations and asserted various affirmative defenses.

Cases Consolidated

Because the FINRA Arbitration Panel found the two arbitrations to have arisen out of the same underlying facts, the Panel granted  Claimant Synergy's Motion to Consolidate. Additionally, the Arbitration Panel noted that it had "granted substantial accommodation to Coleman as a pro se party. However, we also found that Coleman had an understanding of litigation and arbitration proceedings . . ."

Double TKO, Sort Of 

The FINRA Arbitration Panel characterized Synergy's claims against Coleman as based on the provisions of a Representative Agreement (RA) and Office of Supervisory Jurisdiction Agreements. The Panel found that: 

Synergy failed to satisfy the burden of proof required in proving the authenticity of these documents submitted in evidence as being the agreements actually signed by Coleman.

Consequently, the Panel denied all of Synergy's claims against Coleman and ordered the release to Coleman of $30,756.00, which had been held in escrow by Synergy's attorneys. 

Separately, the Panel found that Coleman failed to meet his burden of proof against Synergy and dismissed his claims. In fairly harsh language, the Panel noted that: 

Throughout the entire case, Coleman repeatedly failed to comply with the Code of Arbitration Procedure and the Orders of the Panel. These failures and Coleman's conduct at the hearings substantially and unnecessarily prolonged the hearings. 

In consideration of Coleman's abusive conduct, the Panel sanctioned him with $32,100, representing 30% of the $107,000 in attorneys' fee requested by Synergy.

Bill Singer's Comment

I am hard pressed to recall a case in which a FINRA Arbitration Panel appeared more disgusted by the conduct of both Claimant and Respondent.  It's fairly amazing to see an Arbitration Panel chastize a Claimant for failing to prove the authenticty of the key documents in a case - especially as to the issue of whether those papers were signed by the party charged with their execution. 

Frankly, ya gotta wonder what the hell Synergy had saved by way of documentation and what it had produced to the Panel.  I mean, c'mon, either it's an original, signed copy or it's not; and if you're suing over an alleged breach of an agreement, you better be able to produce one with a signature.  If not, the whole ratification by conduct thing and quantum meruit considerations get quite antsy. 

Another stunning aspect of this arbitration was the imposition of sanctions upon a pro se litigant for prolonging the hearings. Given that many FINRA Arbitrators bend over backwards to accomodate such unrepresented folks, Claimant Coleman seems to have enraged this Panel. 

Given the huge damages both parties sought and the puny dollars that eventually wound up in their pockets (essentially a "push"), I am comfortable saying that no one truly won this arbitration.  At best, we have two boxers on the canvass, dazed and bleeding, on their hands and knees, and both being counted out.