Somehow, Someday, Somewhere -- a FINRA Customer arbitration.

June 3, 2010

Acting as his own legal counsel, public customer Guy Girgenti filed a Financial Industry Regulatory Authority (FINRA) arbitration on March 12, 2009, seeking $160,000 in compensatory damages plus interest, attorneys' fees, and costs., against Janney Montgomery Scott LLC and Janice Ginsburg. Pro Se Claimant Girgenti alleged causes of action for breach of contract, breach of fiduciary duty, unsuitable investments, negligence, failure to supervise, and respondeat superior. Guy Girgenti, Claimant, vs. Janney Montgomery Scott, LLC and Janice Ginsburg, Respondents (FINRA Arbitration 09-01381, May 26, 2010).

Respondents generally denied the allegations and asserted various affirmative defenses. On or about March 1,2010, Claimant Girgenti withdrew his claims against Respondents. Why?  As usual, the FINRA Decision offers sparse details about this case and even fewer explanations -- fact is, all that we bascially know is that Girgenti filed a Statement of Claim alleging the broad charges noted above, and then, nearly a year later, he picked up his chips and went home. All bets off.

Unfinished Business -- My Good Name

Although Girgenti may have been satisfied to walk away, Respondent Ginsburg would have none of that.  Her name was dragged into the case as a respondent, and that event was now on her Central Registration Depository (CRD) records -- Wall Street's equivalent of the dreaded High School "permanent record." As such, Registered Representative Ginsburg sought expungement of Girgenti's allegations from her CRD files. Accordingly, the FINRA Arbitration Panel conducted a recorded telephonic hearing on April 9, 2010 so Ginsburg could present oral argument on her request for expungement.

Reiterating my earlier lament, the FINRA Decision does not specify what securities or transactions were at the core of Girgenti's complaints, and does not sketch out the nature of the case.  Broad, broad brushstrokes.  However, in considering Ginsburg's expungement petition, the FINRA Arbitration Panel determined that Girgenti did not inherit cash from his mother but was one of three beneficiaries on various annuity policies, which provided death benefits. Moreover, the Panel determined that any losses Girgenti may have incurred were a direct result of his decisions, actions, non-actions, and market conditions, not as a proximate result of any conduct by Respondent Janice Ginsberg.

The Panel recommended the expungement of all reference to the arbitration from Respondent Janice Ginsburg's CRD records pursuant to the requirements set form in NASD Notice to Members 04-16, which requires, among other factors, that Respondent Janice Ginsburg must obtain confirmation from a court of competent jurisdiction before the CRD will execute the expungement directive.

Bill Singer's Comment: Sometimes the broker is wrong. Sometimes the markets go nuts and crash. And, yes, sometimes, it's just the customer's fault. As best we can figure from the sparse fact pattern presented in this case, Girgenti lost money - somehow, someday, somewhere . . . gee, this sounds like that song from West Side Story. What we can also conclude is that the FINRA panel did not find any losses to have been the fault of Girgenti's stockbroker.  The important takeaway here for industry professionals is that by hanging in there and not settling, Ginsburg obtained a valuable expungement from her CRD records.

There's a place for us,
A time and place for us.
Hold my hand and we're halfway there.
Hold my hand and I'll take you there
Some day,

Here's a little bonus:  A lovely version of "Somewhere"  Enjoy!