Merchant Suckers, Whore, and Little Bitch In FINRA Arbitration

December 16, 2015

By the time folks wind up in court or arbitration, you often have a lot of hurt feelings, simmering anger, and a camel one straw shy of a broken back. As a recent FINRA intra-industry arbitration shows, the boiling point may be quickly reached. Be warned: there's some nasty language in today's Blog -- and there's even an inappropriate video at the end.

Case In Point

In a Financial Industry Regulatory Authority ("FINRA") Arbitration Statement of Claim filed in July 2014, registered representative Claimant Cullen, who represented himself pro se, alleged that Respondents Molen, Olson, and Hewitt had terminated his employment at Thrivent Financial in retaliation for his having informed regulators about the allegedly incompetent handling of customer accounts. Claimant further alleged that Respondent Molen had fabricated false, defaming and damaging accusations on his Form U5. In addition to seeking the expungement of his Central Registration Depository records ("CRD"), Claimant sought $200,000 in compensatory damages.In the Matter of the FINRA Arbitration Between Joseph Orval Cullen, Claimant, vs. Stephen Theodore Molen, Knut Andrew Olson and Bradford Leigh Hewitt, Respondents (FINRA Arbitration 14-02348, December 4, 2015).

Respondents generally denied the allegations and asserted various affirmative defenses.

Motion To Dismiss

On November 16, 2015, Respondents filed a Motion to Dismiss based on Claimant's:

  • repeated failure to respond to discovery requests,
  • his alleged abuse of opposing counsel, and
  • his failure to obey the Chair's discovery orders.
In his November 17, 2015, e-mail response, Claimant stated that he believed he had adhered to the Chair's discovery orders and had satisfactorily responded to Respondent's discovery requests.

On November 19, 2015, Respondents filed a Supplement to their motion, in which they asserted that Claimant had also failed to meet the November 17, 2015, deadline for filing witness and exhibit lists (as ordered by the FINRA Arbitration Panel's July 30, 2015, Scheduling Order).

The Rulebook

Discovery disputes are common not just in arbitration but in virtually all forms of litigation. As to discovery conducted during FINRA arbitrations, note the following applicable rules:

FINRA Code of Arbitration Rule 13505. Cooperation of Parties in Discovery

The parties must cooperate to the fullest extent practicable in the exchange of documents and information to expedite the arbitration.

FINRA Code of Arbitration Rule 13511. Discovery Sanctions

(a) Failure to cooperate in the exchange of documents and information as required under the Code may result in sanctions. The panel may issue sanctions against any party in accordance with Rule 13212(a) for:
  • Failing to comply with the discovery provisions of the Code, unless the panel determines that there is substantial justification for the failure to comply; or 
  • Frivolously objecting to the production of requested documents or information.
(b) The panel may dismiss a claim, defense or proceeding with prejudice in accordance with 13212(c) for intentional and material failure to comply with a discovery order of the panel if prior warnings or sanctions have proven ineffective.

FINRA Code of Arbitration Rule 13212. Sanctions

(a) The panel may sanction a party for failure to comply with any provision in the Code, or any order of the panel or single arbitrator authorized to act on behalf of the panel. Unless prohibited by applicable law, sanctions may include, but are not limited to:
  • Assessing monetary penalties payable to one or more parties;
  • Precluding a party from presenting evidence;
  • Making an adverse inference against a party; 
  • Assessing postponement and/or forum fees; and 
  • Assessing attorneys' fees, costs and expenses.
(b) The panel may initiate a disciplinary referral at the conclusion of an arbitration.
(c) The panel may dismiss a claim, defense or arbitration with prejudice as a sanction for material and intentional failure to comply with an order of the panel if prior warnings or sanctions have proven ineffective.

That Little Bitch

Following a December 1, 2015, hearing on the Motion to Dismiss, the FINRA Arbitration Panel granted the application. In explaining the December 3, 2015, dismissal, the Panel offered this explanation:

[T]he history of this case reflects a pattern of Claimant's failure to adhere to FINRA's discovery rules and this Panel's orders. During discovery, Claimant produced only one document and provided no written discovery responses. In subsequent meet and confer communications, Claimant was threatening and abusive. As an example, when asked by Respondents' counsel whether there would be any further responses. Claimant e-mailed:

See sweetie, you're just like that little bitch you represent, and the merchant suckers you whore yourself out too [sic]...You have nothing to substantiate your claim to begin with.

. . .

The Panel finds that Claimant's failure to comply with FINRA's discovery rules and the order of the Chair was intentional and material. In addition, the Chair's November 3, 2015, order was a clear warning that Claimant's actions were sanctionable. Nevertheless, he failed to comply with that order. The Panel also cannot turn a blind eye to Claimant's threatening and abusive responses to Respondents' counsel's legitimate inquiries.

In accordance with its findings, the FINRA Arbitration Panel unanimously ordered that all of Claimant Cullen's claims be dismissed in their entirety with prejudice.

Bill Singer's Comment

2013 Arbitration Claim

FINRA's online arbitration records disclose that a FINRA Arbitration Statement of Claim was filed in April 2013 by Claimant Cullen, who represented himself pro se, and he alleged failure to supervise, negligence, compensation owing, failure to execute, and defamation. Claimant sought $18,000 in compensatory damages, interest, attonreys' fees, and costs.In the Matter of the FINRA Arbitration Between Joseph Orval Cullen, Claimant, vs. Janice Suutala and Thrivent Investment Management, Inc, Respondents (FINRA Arbitration 13-01153, February 25, 2014).

The sole FINRA Arbitrator hearing Claimant Cullen's 2013 arbitration denied the claims in their entirety.

BrokerCheck Records

Online FINRA BrokerCheck records as of December 16, 2015, disclose that Cullen was first registered in 2010, at which time he was associated with FINRA member firm Thrivent Investment Management, Inc. BrokerCheck records further disclose that Thrivent "Discharged" Cullen on January 13, 2014, based upon allegations that:


You know, I gotta tell ya, I find it hard to believe that Cullen had admitted to submitting a false written statement to a FINRA arbitrator. If he did, then I wish that Thrivent had spelled out the date of this admission and the nature of the false statement. Given the seriousness of potentially perjuring oneself during an arbitration, I'm also curious as to whether Thrivent filed any criminal charges against Cullen or brought the alleged falsehood to the attention of FINRA or any industry regulator. Notably, there is no indication in the February 25, 2014, FINRA Arbitration Decision that the sole FINRA Arbitrator found that Cullen had submitted a false written statement during the arbitration.

It strains credulity that an employee would sue his employer in April 2013 but that the firm would only fire that employee in January 2014 -- and the reason for the termination would be premised upon the employee's alleged submission (likely in 2013) of a false statement to a FINRA Arbitrator. Thrivent certainly should have and could have spelled out the underlying facts with some more oomph. A more detailed explanation of the purported falsehood would have placed the employer in a better light and have lessened the impression that we're going tit-for-tat here.

In the end, Cullen did himself no service by his outrageous conduct during the 2015 FINRA arbitration.

Lemme see here, just what song would be a perfect send-off for all this nonsense?