One FINRA Arbitration.Three Respondents. Three Different Outcomes.

August 16, 2010

By Statement of Claim filed in September 2007, Claimant Wachovia Securities, LLC. alleged,

  • Breach of Protocol Agreement;
  • Breach of Contract;
  • Breach of Fiduciary Duty;
  • Unfair Competition;
  • Repayment of Promissory Notes;
  • Repayment of "Front" Fees and expenses; and
  • Repayment of Client Charge-Backs.


  • Citigroup Global Markets,
  • John C. Zannakis, and
  • William E. REDACTED

generally denied the allegations and asserted various affirmative defenses.  Respondents Zannakis and Wolfson counterclaimed for unpaid wages. In the Matter of Wachovia Securities, LLC, Claimant, versus John C. Zannakis, William E. REDACTED, and Citgroup Global Markets, Respondents. (FINRA Arbitration $07-02623, August 10, 2010).

One Arbitration But Three Very Different Outcomes for the Three Respondents

On June 25, 2009, Claimant dismissed its claims against Citigroup. One down, two to go.

In June 2009, Respondent REDACTED filed for bankruptcy and in accordance with the law, all claims against him are stayed.  Consequently, the FINRA Arbitration Panel has not made any determination concerning the claims against him.  Two down, one to go.

The FINRA Arbitration Panel found Respondent Zannakis liable for $85,863.00 in compensatory damages, $14,597.00 in interest from August 2007 through July 2010; $8,000 in Claimant's attorneys' fees (pursuant to the terms of the Promissory Note Agreement); and $500 in filing fees.



[M]aybe I'm just dense but did anyone at the SEC or FINRA even bother to monitor Morgan Stanley's monthly statements for this mandated disclosure -- you know, like for even one month during the six in question? After all, hundreds of millions of dollars later, many promises later, years later, Morgan Stanley agreed to print a disclosure on its statements that indicated the availability of the independent research. Apparently, that disclosure didn't make it on to the statements. Sort of an easy omission to spot, no? And the excuse from Wall Street's cops is what? They were too busy on other more important things?

We didn't see it. Is that the sorry state to which Wall Street's regulators have fallen? Of course, if you're not looking, you can't see anything.

Moreover, given that FINRA is crediting "Morgan Stanley's self-review and self reporting of some of its disclosure violations. . ." you have to wonder whether any regulator would have uncovered this long-term, massive disclosure failure by Morgan Stanley but for the firm's own efforts to come clean. . .

Read Bill Singer's Entire Huffington Post Article at: