Ameriprise Sort Of Wins FINRA Promissory Note Arbitration

February 5, 2013

English: Question marks with transparent backg...

Too many questions remain in this FINRA arbitration

In a Financial Industry Regulatory Authority ("FINRA") Arbitration Statement of Claim filed in June 2011, Claimant Ameriprise asserted breach of contract in connection with Respondent Buccelli's alleged failure to repay the balance due on a promissory note dated April 13, 2007, upon the termination of his employment.  Claimant sought:

  • $145,590.31 principal due;
  • 4.86% interest from November 1, 2009 through December 8, 2009;
  • 7% interest ($27.92) per day from December 8, 2009, until paid;
  • Costs;
  • Attorneys' fees; and
  • An Order allowing Claimant to liquidate the positions in Respondent's securities account and apply the proceeds of such liquidation to amounts due to Claimant by Respondent.

In the Matter of the FINRA Arbitration Between Ameriprise FinancialServices, Inc., Claimant, vs. Kenneth N. Buccelli, Respondent (FINRA Arbitration 11-02299, January 31, 2013).

Respondent Buccelli generally denied the allegations ad asserted various affirmative defenses.

A Moving Tale

Prior to the appointment of the Arbitrator in this matter, Claimant filed a Motion for More Definite Statement which was rendered moot when Respondent agreed to file an Amended Answer; however, following receipt of the Amended Answer,Claimant was still not satisfied and renewed its objections of vagueness. Around August 9, 2012, the Arbitrator issued an Order that, among other things, granted Claimant's motion.


The sole FINRA Arbitrator hearing this matter found Respondent Buccelli liable and ordered him to pay to Claimant $73,107 in compensatory damages subject to a $5,000 award in favor or Respondent "as and for a referral fee."

Additionally, the Arbitrator found Respondent liable for 4.8% accrued interest on $68,107 from November 1, 2009 to December 8, 2009; and a further 7% interest from December 9, 2009, until the Award is paid in full. Claimant was awarded $30,000 in attorneys' fees as provided under the terms of the Note.

Finally, the Arbitrator ordered that Respondent's joint account be immediately unfrozen upon receipt of this award.

Bill Singers Comment

Grrrr . . . I truly hate these types of FINRA Arbitration Decisions, which tend to leave far too many questions unanswered (and, to boot, toss in a few additional questions that we didn't need to deal with). For example, one would think that when a FINRA arbitrator essentially admonishes a Respondent for not responding to the claims with sufficient clarity as to make heads or tails out of what's being denied, admitted, or explained, the case will likely conclude very favorably for the Claimant. How, then, are we to explain why Claimant got only about half of the principal sought on the promissory note?

Oh yeah, I know, there could be lots of compelling reasons: the amount sought was excessive, the amount sought was wrongly calculated, the arbitrator found some mitigation . . . if you wish to add to that list, feel free because I'm not disputing any suggestion. What I am making a point about is that the Decisionl failed to explain why it awarded nearly half the principal sought.

Then there's that whole $5,000 referral fee off-set. As in a bolt from the blue that was never explained and we aren't so much as offered even a flip explanation for that ruling.  If you're going to reference a referral fee in the award, would it be asking too much for the arbitrator to have previously explained what this issue was about?

Finally, in unfreezing Respondent's account, did the Decision intend to permit Claimant to liquidate the account and generate proceeds to pay off the Award (as Claimant had requested); or, was the release intended to return the account in an unfettered capacity back to Respondent? A bit of an explanation might have helped.

Sadly, there's as much murk in these waters as when we first entered.

See these "Street Sweeper" columns about EFLs and promissory note cases: