One Egregious, Punitive FINRA Arbitration and One Inexplicable FINRA Arbitration Award.

August 2, 2010

In a Statement of Claim initially filed in January 2009, Claimant Rohan Russell, who proceeded pro se, claimed to have sustained damages as a result of his inability to liquidate his position in Calypso Wireless, Inc. Claimant sought $31,500 in compensatory damages, $63,000 in lost opportunity damages, and $3,600 in interest. Claimant also sought $100,000 in punitive damages. In the Matter of the Arbitration Between Rohan Russell, Claimant vs. Northgate Securities, Inc., Respondent (FINRA Arbitration # 09-00329, July 30, 2010)

Respondents generally denied the allegations.

The FINRA Arbitration Panel found Respondent liable and ordered it to pay to Claimant:

  • $31.500.00 in compensatory damages, and
  • $50,000.00 in punitive damages "for egregious conduct on the part of Respondent and ite representative Richard Pattin not to have fully disclosed to Claimant all information available to Respondent relative to the transaction in question."

Bill Singer's Comment: As FINRA arbitration cases go, this one slams the Respondent with a whopping punitive damage, which is nearly double the alleged compensatory damage sought.  Apparently, the Panel found that the non-disclosure of information wasn't just mere negligence or an everyday oversight but "egregious."  Of course, you know my old complaint about these FINRA decisions -- like, maybe, just maybe, the decision could have set forth what the hell the "egregious conduct" was?  Nonetheless, yes Virginia, FINRA arbitration panels do award punitive damages.

= = = = = = = = = = = = = = = = = = = = = =

In a Statement of Claim filed in June 2009, Claimant Marcia Baker alleged various causes of action including fraud and negligence related to the "purchase of unspecified stocks and options."  Claimants requested $658,255.87 in compensatory damages plus fees, costs, punitive/exemplary damages. Respondents generally denied the allegations and asserted various affirmative defenses. In the Matter of the Arbitration Between Marcia Baker,Claimant vs. Global Trading Group,Inc. and William Savary, Respondents (FINRA Arbitration # 09-04019, July 30,2010)

The FINRA Arbitration Panel found Respondents jointly and severally liable and ordered them to pay Claimant Baker

  • $226,419.59 (consisting of Claimant's $200,000 investment plus 8% compound interest from May 2003 until July 8, 2010, minus all withdrawals); and
  • $84,257 in attorney fees.

Bill Singer's Comment: And speaking of FINRA arbitration decisions that drive me nuts (so,yeah, okay -- maybe that's not such a long drive these days), here's a classic.

Claimant alleges fraud and negligence in the purchase of . . . "unspecified stocks and options." Gee, that clears that up!

Claimant seeks a signficant compensatory damage of some $658,000.  How did Claimant arrive at that number? Dunno.  The decision doesn't offer any explanation.

Respondents denied the allegations.  That's nice. Of course, I'm not sure what the hell they're denying.

Based upon that dearth of facts, the FINRA Arbitrators awarded Claimant's $200,000 investment plus compounded interest, which we are told adds up to over $226,000.  Ummm . . . what $200,000 investment?  How did the Panel get from the requested $658,000 down to $226,000?

Thankfully, the Claimant's lawyer go $84,257 in awarded fees.  What he or she did to earn that is beyond me because the FINRA decision simply explains that some kind of claim was filed about some trades involving some money and that there were allegations about some misconduct that was denied by the Respondents but that the Panel found that someone did something wrong and awarded some damages and attorneys' fees. 

You got all of that?