Blog by Bill Singer Esq WEEK IN REVIEW

July 30, 2022

( Blog)
If you are a FINRA Small Firm you don't need me to tell you how dire things have become in 2022. Year after year, the numbers of small firms have dwindled to the point where there are now more FINRA employees than FINRA member firms. In response to that changing landscape, the FINRA Large Firms have consolidated their grip on FINRA and continue to socially engineer their small competitors out of business. Each year, candidates for one of the three FINRA Small Firm seats seek your vote and promise to speak out and speak up on your behalf.  Once elected, however, your purported champions become complacent -- some might even say compliant. I have known Stephen Kohn for many years. Stephen has owned his own small firm. He has been in our biz for decades. Stephen sees the crisis that is upon us, and he knows that it's now or never.  He will take his seat at the FINRA Board, but he will not be told to sit down and shut up. VOTE FOR STEPHEN KOHN!
After FINRA accepted his Offer of Settlement in 2017 and imposed a $5,000 fine and three-month suspension, Robert Loftus had the regulatory equivalent of buyer's remorse. To some extent, his bout with FINRA ended per a TKO but he wasn't done fighting. First, in 2020, Loftus tried to get his day in FINRA arbitration but was told he was ineligible. Then, Loftus tried to get his day in court but FINRA's Motion to Dismiss was granted. Not taking "no" for an answer, Loftus asked the federal court to reconsider. At first glance, frankly, it all seems a bit silly. You got a 2017 settlement but you're first trying to undo it three years later? Three years?? Why didn't you just contest FINRA's charges when they were filed in 2016? Ultimately, there was a lot of fight in Loftus, but it largely seemed to arise after the bell had rung for the last round at FINRA.
Fidelity Brokerage Services LLC filed a FINRA Arbitration Statement of Claim against a former employee citing her alleged misuse of confidential customer information. Then, on a second track, Fidelity chugs into federal court with another lawsuit, which prompted amended complaints and counterclaims, and the addition of a non-FINRA-member-firm. On top of that, the former employee filed her own claims involving alleged age and sex discrimination. What's arbitrable? What's not? Where should all of this get decided? Should one of the litigation trains get stopped in its tracks?