Court Suspends Former NYSE Arbitration Counsel and FINRA Arbitrator

April 10, 2019

Today's blog presents the disturbing case of a suspended lawyer. The lawyer was employed as an Arbitration Counsel with the New York Stock Exchange before she was admitted to the Bar. About two decades after ending her first stint as a NYSE Arbitration Counsel, the lawyer returned to NYSE in that same capacity; except, in the ensuing period she had been suspended from the practice of law in New York State. All of which made NYSE a two-time-loser that employed an unadmitted lawyer as a counsel and then employed that same lawyer as a counsel while she was suspended. Making matters worse, while suspended, this same lawyer served as an Arbitrator with the Financial Industry Regulatory Authority ("FINRA") and she held herself out to potential litigants as a duly registered attorney! Not the best example of legal ethics by the suspended lawyer. Not the best example of due diligence by NYSE or FINRA.  Certainly, this lawyer seems headed for disbarment.  -- or so you'd think. Think again. And while you're re-thinking, consider how the misfortunes of life inject themselves into our professional careers.

1987 Admission. 1998 Suspension

Respondent Giovati was admitted to the Bar of the State of New York in January 1987. Giovati was suspended by the New York State Supreme Court, Appellate Division (the "Court") via an Order dated February 3, 1998, effective March 6, 1998, that was part of a mass suspension proceeding for failure to file attorney registration statements and pay biennial registration fees. In the Matter of Maive Rita Giovati, a suspended attorney: Attorney Grievance Committee for the First Judicial Department, Petitioner, Maive Rita Giovati, Respondent (Order, NYS Appellate Division, First Department, 2019 NY Slip Op 02667 / April 9, 2019) 

2016 Motion for Disbarment

In 2016, the Attorney Grievance Committee ("AGC") moved for Giovati's immediate disbarment after finding that she had engaged in the unauthorized practice of law in willful violation of the Court's 1998 suspension order. Although the Court denied AGS's motion without prejudice, Giovati remained suspended. 

2018 AGC Petition

In June 2018, AGC filed a Petition with 11 charges alleging that Giovati had, in part:

failed to meet her registration obligations, engaged in the unauthorized practice of law while suspended, and filed false affidavits and documents with the courts, the Office of Court Administration (OCA), and the AGC. In her answer, respondent admitted four of the charges but asserted that her misconduct was due to unintentional error. 

By Order dated November 16, 2018, the Court appointed a referee to conduct a hearing and make a sanction recommendation. In pertinent part, the Court notes [Ed: footnotes omitted]:

Respondent admits that she engaged in the unauthorized practice of law prior and subsequent to her March 6, 1998 suspension: from 1986 to 1987 respondent was employed as an Arbitration Counsel with the New York Stock Exchange (NYSE), the commencement of which pre-dated her January 1987 admission; from September 2004 through January/February 2006, respondent, while suspended, resumed her employment as an Arbitration Counsel with the NYSE; and between 1989 and 2014 respondent served as an arbitrator for the Financial Industry Regulatory Authority (FINRA) during which period she held herself out as a duly registered attorney; and commencing in 2007 respondent served as a volunteer for the New York City Bar Association's (NYCBA) Monday Night Law (MNL) program (which provides free legal advice to members of the public who make appointments to meet with two partnered attorneys) in which capacity respondent held herself out to the NYCBA and the public as a licensed attorney and dispensed legal advice to MNL's "clients." Respondent continued to participate in the MNL program after she learned of her suspension.

Respondent admits further that she made false statements to the courts, OCA, and the AGC. In May 2015, respondent submitted an affidavit to the Second Department to change the name under which she practices law in which she falsely stated that she was in good standing at the bar and not suspended from practice. Respondent asserts that her claim of good standing was done by mistake, which she tried to correct by contacting the Second Department upon learning of her error.

On May 28, 2015, two days after she executed this false affidavit, respondent registered with OCA, paid delinquent fees for 1987-1989 and 2011-2016, but falsely certified that she was retired under 22 NYCRR 118.1(g)from 1991 through 2010 (during which period respondent was employed as an Arbitration Counsel with the NYSE [2004-2006]) and, therefore, was exempt from paying registration fees for this period. Respondent asserts that she certified as retired for the aforementioned period because she received erroneous information from court personnel, but upon learning of the error she rescinded her retirement claim and paid the fees due.

Additionally, on her May 28, 2015 registration form respondent affirmed that she had completed 196 CLE credits, had retained certificates of attendance/completion for such, and was in full compliance with 22 NYCRR Part 1500's CLE requirements. Respondent, however, produced certificates documenting completion of only 142.85 CLE credits (she needed at least 192 CLE hours at that time). Respondent admits that she reported an incorrect number of CLE credits on the OCA registration form but that this "was an unintentional error made during a stressful time of trying to be reinstated to the New York Bar so that she [could] be financially independent of her emotionally and financially abusive husband, [from] whom she [has] been separated for 17 years."

In July 2015, respondent submitted an affidavit to this Court in support of her motion for reinstatement in which she stated "[t]he reason for my default in registration is that I stopped practicing law in November 1992 and have [n]ot resumed the practice of law, I did not realize I still needed to pay registration dues to remain in good standing. I thought that my registration would lapse without any consequences. In March of 2015, I learned that I misunderstood the New York [S]tate Bar Rules for non-practicing attorneys." Respondent admits that she did not cease the practice of law in 1992 as represented and evidenced by her employment as an Arbitration Counsel with the NYSE between 2004 and 2006, as well as by her participation in the NYCBA's MNL program commencing in 2007.

2019 Nunc Pro Tunc Suspension

In response to a Joint Motion for Discipline by consent, the Court granted the motion and suspended Giovati for a period of five years, nunc pro tunc (which means "now for then" and indicates a retroactive application) to September 21, 2015, and until further ordered. The Court found that Giovati: 
    • engaged in the unauthorized practice of law when she practiced law in New York State in 1986 before she her January 1987 admission; and 
    • after she was suspended effective March 6, 1998;
  • held herself out to the public as being authorized and entitled to practice law in New York State before her admission to the New York Bar and after her March 1998 suspension;
  • engaged in conduct involving dishonesty, fraud, deceit or misrepresentation by: 
    • falsely claiming to FINRA that she was admitted to practice in New York State in 1986 when her actual date of admission was January 14, 1987; 
    • submitting false affidavits to the Second Department in which she 
      • misrepresented that she was an attorney in good standing when in fact she was suspended; and
      • represented that she was current in the payment of her biennial registration fees when she was not; 
    • falsely certifying to the Office of Court Administration ("OCA") that she was retired from the practice of law from 1991 through 2010 and, therefore, was exempt from payment of registration fees for this period, when she was not; 
    • submitting an answer to the AGC and attorney registration forms to OCA in which she misrepresented that she had completed 196 CLE credits and fulfilled her CLE obligations when she had not; and
    • submitting a false affidavit to this Court in which she misrepresented that she ceased the practice of law in November 1992 when she had not;
  • engaged in conduct that adversely reflects on her fitness as a lawyer when she failed to comply with her registration obligations since her admission in 1987; and 
  • engaged in conduct that adversely reflects on her fitness as a lawyer by engaging in the unauthorized practice of law and filing false affidavits and documents with the courts, OCA, and the AGC.
Bill Singer's Comment

You may be puzzled, as I was. What the hell does a lawyer need to do to get disbarred? After all, the list of charges against Giovati are extensive and, frankly, overwhelmingly so. Why did the Court do nothing more than impose what amounts to a five-year retroactive suspension back to September 2015, but subject to the "further order of this Court"? Clearly, something is just not adding up. 

Not motivated by a desire to manipulate my readers but more as an exercise in demonstrating the nature and impact of mitigating factors, I have left out certain key aspects of Giovati's background, which were known to the Court and which are set out in its Order per the "parties have stipulated to the following mitigating factors." [Ed: footnotes omitted]:

Respondent asserts that: she did not willfully fail to comply with her attorney registration requirements as she was unaware of the actual requirements; when she was hired in 1986 she was given the title of Arbitration Counsel by the NYSE which was aware that she had just passed the New York bar exam, and she was in training and under the guidance of a senior attorney until she was admitted to the New York Bar; she did not know of her March 6, 1998 suspension, was never notified of such, and never received any attorney registration forms until May 2015; respondent cooperated with the AGC and paid all registration fees with the exception of the 2017-2018 biennial period due to financial hardship; she has been unable to work in the legal field for the last three years; and her financial situation is dire and it is necessary for her to work and support her family;

Respondent is 65 years old, she has Multiple Sclerosis and is a cancer survivor, she has been cancer free for 18 months, and the procedures connected to her cancer diagnosis continue. The parties assert that while this Court has generally disbarred attorneys who engage in the unauthorized practice of law in violation of a disciplinary suspension order, there are no cases directly on point involving an attorney disbarred for violating a suspension order based on failure to register; and they agree that under the circumstances respondent should be suspended for five years retroactive to September 21, 2015 (date of this Court's order denying prior motion for reinstatement).

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