After considering the pleadings, the testimony and evidence presented at the hearing, and any post-hearing submissions, the Arbitrator has decided in full and final resolution of the issues submitted for determination as follows:1. Respondent is liable for and shall pay to Claimant the sum of $75.00 in compensatory damages.2. Any and all claims for relief not specifically addressed herein, including any requests for punitive damages, treble damages, and attorneys' fees, are denied.
(a) All awards shall be in writing and signed by a majority of the arbitrators or as required by applicable law. Such awards may be entered as a judgment in any court of competent jurisdiction.(b) Unless the applicable law directs otherwise, all awards rendered under the Code are final and are not subject to review or appeal.(c) The Director will serve the award on each party, or the representative of the party.(d) The panel shall endeavor to render an award within 30 business days from the date the record is closed.(e) The award shall contain the following:
(1) The names of the parties;(2) The name of the parties' representatives, if any;(3) An acknowledgement by the arbitrators that they have each read the pleadings and other materials filed by the parties;(4) A summary of the issues, including the type(s) of any security or product, in controversy;(5) The damages and other relief requested;(6) The damages and other relief awarded;(7) A statement of any other issues resolved;(8) The allocation of forum fees and any other fees allocable by the panel;(9) The names of the arbitrators;(10) The dates the claim was filed and the award rendered;(11) The number and dates of hearing sessions;(12) The location of the hearings; and(13) The signatures of the arbitrators.
(f) The award may contain a rationale underlying the award.(g) Explained Decisions
(1) This paragraph (g) applies only when all parties jointly request an explained decision.(2) An explained decision is a fact-based award stating the general reason(s) for the arbitrators' decision. Inclusion of legal authorities and damage calculations is not required.(3) Parties must make any request for an explained decision no later than the time for the prehearing exchange of documents and witness lists under Rule 12514(d).(4) The chairperson of the panel will be responsible for writing the explained decision.(5) The chairperson will receive an additional honorarium of $400 for writing the explained decision, as required by this paragraph (g).(6) This paragraph (g) will not apply to simplified cases decided without a hearing under Rule 12800 or to default cases conducted under Rule 12801.
(h) All awards shall be made publicly available.(i) Fees and assessments imposed by the arbitrators under the Code shall be paid immediately upon the receipt of the award by the parties. Payment of such fees shall not be deemed ratification of the award by the parties.(j) All monetary awards shall be paid within 30 days of receipt unless a motion to vacate has been filed with a court of competent jurisdiction. Absent specification to the contrary in the award, when arbitrators order opposing parties to make payments to one another, the monetary awards shall offset, and the party assessed the larger amount shall pay the net difference. An award shall bear interest from the date of the award:
(1) If not paid within 30 days of receipt;(2) If the award is the subject of a motion to vacate which is denied; or(3) As specified by the panel in the award.
Interest shall be assessed at the legal rate, if any, then prevailing in the state where the award was rendered, or at a rate set by the arbitrator(s).
On August 6, 2021, Rifkind filed a Motion to Remand the case back to state court arguing that this Court does not have diversity jurisdiction. (ECF No. 5). On August 9, 2021, Wells Fargo filed its Corporate Disclosure Statement. (ECF No. 10). On August 13, 2021, Rifkind filed a "Notification and Disclosure" regarding Wells Fargo's corporate citizenship as an apparent supplement to his Motion to Remand. (ECF No. 12). Wells Fargo filed an Opposition to the Motion to Remand on August 20, 2021, (ECF No. 13), and Rifkind filed a Reply on September 2, 2021, (ECF No. 16).
A. Rifkind's IRA with Wells FargoSelf-represented Plaintiff Nicholai Rifkind opened an IRA account with Defendant Wells Fargo Clearing Services, LLC d/b/a Wells Fargo Advisors ("Wells Fargo") in 2007, funding the account with about $49,000. (Statement Claim ["Claim"] at 1, ECF No. 8-1). He alleges that an employee of Wells Fargo told him that the rate of return would "be about 4.5%," but certainly over 4.25%. (Id.). Rifkind contends that he began receiving statements from Wells Fargo five to six years ago and discovered "that there was no interest applied." (Id.). He called Wells Fargo "many times" to resolve his concerns regarding his account. (Id.). Eventually, someone at Wells Fargo "explained that interest was paid at the beginning and very soon after stopped being paid." (Id.). Wells Fargo credited Rifkind's account with $400 and a small amount of interest. (Id.). Later, a representative named Katrina Hubbard offered Rifkind "a settlement of [an] additional $440" if he accepted within thirty days. (Id.). Rifkind did not reply. (Id.).B. ArbitrationRifkind initiated arbitration proceedings before the Financial Industry Regulatory Authority ("FINRA") on March 20, 2020. (See Sept. 1, 2020 FINRA Notice at 1, ECF No.8-1). On September 1, 2020, FINRA sent Wells Fargo a copy of Rifkind's Statement of Claim. (Id.). In it, Rifkind alleges that if Wells Fargo had properly managed his account, his $49,000 principal sum would have grown to $86,837.61, assuming a rate of return of 4.5%. (Claim at 1). Rifkind requests compensatory damages in the amount of $37,892.61, the claimed loss of interest, plus punitive damages of $12,500. (Id.). Wells Fargo filed its Answer on October 21, 2020. (See Award at 1, ECF No. 8-3).6 The parties signed a Submission Agreement wherein they agreed to arbitrate under the FINRA By-Laws, Rules, and Code of Arbitration Procedure. (See Submission Agreement at 1, ECF No. 8-1; Award at 1).A merits hearing was held on March 19, 2021 before FINRA's Sole Public Arbitrator, Thomas J. Dolina ("Arbitrator Dolina"). During the hearing, Rifkind increased his demand to $100,000 "in total damages." (See Award at 2-4). Wells Fargo responded that Rifkind's claim was untimely and that he was responsible for the languishing account because he had not submitted the proper authorization forms "to permit Wells Fargo to invest the funds." (Def.'s Opp'n Rifkind's Mot. Vacate, Correct, Modify FINRA Arbitration Award ["Opp'n Mot. Modify"] at 1, ECF No. 8).On March 24, 2021, Arbitrator Dolina issued an Award finding as follows:
1. [Wells Fargo] is liable for and shall pay to [Rifkind] the sum of $75.00 in compensatory damages.2. Any and all claims for relief not specifically addressed herein, including any requests for punitive damages, treble damages, and attorneys' fees, are denied.
(Award at 2). Although FINRA procedure allows for the parties to jointly request an "explained decision," which would have included Arbitrator Dolina's factual determinations and "the general reasons" behind the decision, there is no indication that the parties made such a request. (See Sept. 1, 2020 FINRA Notice at 7).
[A]rbitrator Dolina "was partial (biased?)" by "accepting [Wells Fargo's] misleading answers" and allowing counsel for Wells Fargo "to misquote laws and regulations." (Mot. Modify at 3, ECF No. 1-5). Wells Fargo responds that Rifkind does not identify or substantiate specific facts that demonstrate partiality. Wells Fargo is correct.
In rejecting Rifkind's allegations against Arbitrator Dolina, DMD found that:[R]ifkind asserts that Arbitrator Dolina was biased in favor of Wells Fargo because he did "not question" Wells Fargo's allegedly incorrect, "inappropriate references to regulations." (Mot. Modify at 3-4). Rifkind argues that this demonstrates partiality because when he attempted to reference the Code of Federal Regulations, Arbitrator Dolina asked him "where [he] found it." (Id. at 4). Further, Rifkind argues that Arbitrator Dolina acted like he did not recognize Wells Fargo's mistakes in its recitation of legal standards during the arbitration. . .
at Pages 13 - 14 of the 2022 DMD OpinionRifkind's allegations are speculative and he offers no evidence linking Arbitrator Dolina financially, personally, or otherwise to Wells Fargo. Accordingly, the Court will not vacate the award under § 10(a)(2).
[H]e contends that Arbitrator Dolina may have intended to award him $75,000.00, and not the $75.00 listed in the award, and therefore the award should be modified because it (1) contains a material miscalculation, and (2) is otherwise imperfect in matter of form requiring modification under § 11(a). (Mot. Modify at 1). Rifkind is incorrect.First, under § 11(a), the Court may modify an award where there is an evident material miscalculation. The award will only be altered where mathematical errors appear on the face of the award. Apex Plumbing, 142 F.3d at 194; Rhines II, 2012 WL 3239916, at *10. Here, Rifkind does not identify any mathematical errors. Instead, he speculates that Arbitrator Dolina may have mistakenly omitted three zeroes and awarded Rifkind "$75.00" when he intended to award him "$75,000." (Mot. Modify at 5). Rifkind's bald speculation is insufficient to demonstrate that Arbitrator Dolina made a mathematical error in computing his award. Accordingly, Rifkind has not met his burden under § 11(a).
Court Finds FINRA Arbitration Process Not Fundamentally Fair (BrokeAndBroker.com Blog)