Why expungements are processed by FINRA's Dispute Resolution Service in an arbitration forum rather than before a regulatory panel is another debate for another day. In today's blog, we have an expungement case in which a FINRA arbitrator recommends the removal of two customer complaints from a stockbroker's industry record. For opponents of FINRA's expungement process -- of which there are many and, often, with meritorious concerns -- today's case should serve to demonstrate that there are, indeed, circumstances where an expungement is appropriate. In one customer complaint, we have "factually impossible" allegations, and in the other complaint, we have "clearly erroneous" allegations. Ah yes, the collision of the impossible with the erroneous!
Today's featured FINRA Arbitration became a New Jersey Superior Court case, which became a FINRA Office of Hearing Officers Decision, which became an SEC appeal, which became another FINRA Office of Hearing Officers Decision, which became another SEC appeal, which became a United States Court of Appeals for the Third Circuit, which, yet again, wound up before the SEC in the form of a petition for reconsideration. Are we done yet? Or are we just takin' a break here to catch our litigious breath? Who the hell knows.
A victorious Claimant in a FINRA arbitration moved to confirm her Award in state court; however, the defeated Respondents moved to vacate in federal court. In federal court, the Respondents seemingly argued that the process of evaluating their motion somehow imbued the court with jurisdiction. Clever tactic? An act of desperation? See what the Court decided.
Sometimes, something just doesn't sit right with you. You know what I'm saying, right? It's one of those things where you completely understand and agree with a regulator's actions, but . . . and it's that "but" that gives you pause. In today's blog, we have one of those "but" moments.