No Show Respondent in FINRA Arbitration Prompts No Explanation in Award

December 6, 2021

When the best that you can say about a FINRA Arbitration Award is that you don't know where to begin, that's not a good thing. Sadly, when it comes to a recent public customer's arbitration against a no-show Respondent, I don't know where to begin.

Case in Point

In a FINA Arbitration Statement of Claim filed in March 2021, public customer Claimant Caswell (represented by a lawyer) asserted suitability; churning; unauthorized trading; fraud; negligent misrepresentation; breaches of contract/fiduciary duty/covenants of good faith/fair dealing; negligent supervision, and failure to supervise. Claimant Caswell sought $40,050.25. In the Matter of the Arbitration Between Robert Caswell, Claimant, v. Lawrence John Fawcett, Jr., Respondent (FINRA Arbitration Award 21-02302)

No Show

The FINRA Arbitration Award represents that a Statement of Claim was filed against Respondent Fawcett, who didn't respond -- no Submission Agreement, no Answer, and he didn't show up at the hearing. Not surprisingly, Claimant Caswell's case proceeded via FINRA Code of Arbitration Procedure for Customer Disputes Rule 12801: Default Proceedings

According to BrokerCheck

Although Respondent Fawcett was a no-show for the arbitration, his industry background is not a mystery: FINRA's online BrokerCheck database discloses that:
  • Fawcett was registered from 2012 to 2018 with five FINRA member firms; 
  • two of the FINRA members firms with which Fawcett was registered were "expelled" by FINRA in 2012 and 2013 respectively;
  • Fawcett accumulated 
    • four "Final/Regulatory Events;" 
    • one "Pending/Customer Dispute," 
    • eight "Final/Customer Disputes," and 
    • one "Final/Termination;"
  • on March 26, 2018, FINRA permanently barred Fawcett for his failure to "produce documents and information, and failed to appear for on-the-record testimony, in response to FINRA Rule 8210 requests, in violation of FINRA Rules 8210 and 2010." In the Matter of Lawrence John Fawcett, Jr., Respondent (FINRA AWC 2017056329801)

The sole FINRA Public Arbitrator denied Claimant Caswell's claims.

Bill Singer's Commentator

So, lemme see if I got this -- we have a public customer Claimant, he's got a lawyer, the only named Respondent doesn't show, that industry Respondent has quite the industry record, and, despite all of that, the sole FINRA Arbitrator denies all claims and dismisses the customer's case.

Okay, sure, there are numerous explanations for how a defaulting party could win a case. Moreover, even a defaulting party with a blemished record can win without saying so much as a word. It happens; however, when defaulting parties win, there's usually some explanation. Some rationale afforded to the public. Even if it's nothing more than a few words. In Caswell, we literally got a whole load of nuthin'. No defense from a no-show Respondent. No rationale from a sole FINRA Arbitrator. No indication that anyone at FINRA so much as reviewed the final draft of the Arbitration Award and thought that under all the circumstances, the document should offer a few words of explanation.