Blog by Bill Singer Esq WEEK IN REVIEW

August 15, 2020
Esteemed Wall Street legal eagle Aegis Frumento pens his 100th Guest Blog for Broke And Broker. As if his name didn't give it away, he's Italian. Surprisingly, it only took Aegis 100 blogs to start talking about zucchini. What the hell is with Italians and their fascination for zucchini? In any event, in addition to Aegis' musings about how he's going to farm zucchini in his backyard during what's left of this fabulous pandemic summer, he's also sitting on his porch and waiting for the semen salesman to stop by. Ummm . . . any suggestions as to how I can politely tell Aegis that I'm really not going to eat any of his homemade zucchini bread?
The United States District Court for the District of New Jersey held that FINRA is entitled to absolute immunity for its regulatory conduct and that there is no private right of action to assert claims related to FINRA's regulatory conduct. No . . . not a shocking ruling or one that is inconsistent with prevailing jurisprudence. Notwithstanding, the better and sounder path is to afford "qualified" immunity to FINRA. Perhaps a better case with better facts will upend this unfair and counter-productive judicial line of reasoning. My hopes aside -- it ain't happening today.
Famed rock 'n roll litigator Bob Dylan offers a fabulous course on civil procedure. In one of his most popular lectures, lawyer Dylan explains that you're gonna have to serve somebody, yes, indeed you're gonna have to serve somebody, well, it may be the devil or it may be the Lord, but, you're gonna have to serve somebody. Of course the way Dylan delivers his lesson is a lot more catchy than drab prose, plus his method has a beat and you can dance to it. In a recent Petition to the United States District Court for the Southern District of New York, we come across the plight of a former employee seeking to vacate an arbitration award. In order to stand before the folks in the robes, the employee needed to serve somebody. He did. Well, technically he did. Well, maybe not technically but he did give it the old college try.
In a FINRA arbitration, Merrill Lynch sued a former employee claiming, in part, misappropriation of trade secrets and unfair competition. Merrill sought compensatory damages and at least $3.285 million plus interest on the employee's Promissory Note. In a stunning rebuke, the FINRA arbitrators ordered Merrill it to pay the former employee $476,500 in compensatory damages; $288,734 in attorneys' fees pursuant to the parties' contractual agreements; $22,408.67 in costs; and allowed the employee to retain the full balance of the Note. Was the Note merely transitional compensation or the payment for the employee's book of business? So . . . comes tax time, how the hell does the employee file? Is the award a capital gain? Is it ordinary income?