Blog by Bill Singer Esq WEEK IN REVIEW

April 18, 2020

( Blog) Blog readers are well aware of Bill Singer's long-standing complaint that FINRA's arbitration forum seems designed to further the interests of its large member firms -- particularly when a given FINRA Arbitration Decision intentionally fails to provide sufficient content and context so as to render it intelligible. Further, FINRA's arbitration rules do not require by default a reasoned decision, and that idiocy perpetuates inexplicable awards and presents appellate courts with a guessing game. In today's featured FINRA Arbitration, we have two federal courts considering the plight of public customers who claimed to have been victimized by fraud; however, as the courts note: The arbitration panel did not make any findings of fact or conclusions of law in its order. Worse, the courts concede that the Panel's final damages award is "disturbing."
Apparently chafing at his prolonged self distancing a la home quarantine, Guest Blogger Aegis Frumento grouses that pandemics put societal imbalances in high relief, spurring people to demand social restructuring. Frumento asserts that our principal social imbalance is inequality; and that we have bred a new class of downtrodden, living paycheck-to-paycheck, overburdened with credit card and student debt, unable to get and keep a decent job, unlikely ever to do as well as their parents, chronically insecure in the heath and livelihood. As Frumento laments, these felt inequities spawn such pathologies as nativism, fundamentalism, hypernationalism, isolationism, racism, anti-intellectualism -- in short, Trumpism.
Jin Song and Paul Sung Uh Kang had known each other for about 20 years, and after Song had opened a TD Ameritrade brokerage account in 2013, he hired Kang to manage the account. After some seven months of Kang's management, Song's account lost $800,000 (it had apparently started with $2 million). A few months later, Song sued Kang for fraud, violations of the Texas Securities Act and the Deceptive Trade Practices Act, breach of fiduciary duty and of contract, and negligence. First, Song won. Then, Song lost. And then he lost. And then he lost again.
In a recent FINRA Arbitration, the dispute seems to have come down to whether a former associated person had left the employ of FINRA member firm GFI in a "good" manner. As dubious a pre-condition as being a "Good Leaver," may seem, it turned out to be no joke because allegedly some seven figures worth of common stock was not issued under the terms of an incentive pay package. What do your think would constitute being deemed a "Good Leaver" in order to qualify for the issuance of stock following separation from employment? After you've thought that through, go ahead and read about today's featured arbitration.