by Bill Singer
How Did I Get Here? Uninvolved But Still Named As Respondent in Customer Complaint
November 15, 2010
In a FINRA Arbitration Statement of Claim filed in July 2009, public customer Bonnie M. Shoultz alleged that she suffered damages due to Respondents' unsuitable investments, negligence, and inappropriate errors and charges to her investment account. In the Matter of the Arbitration Between Bonnie M. Shoultz, Claimant, versus Joshua Jason Billauer, Ralph Thomas Bryan, Christopher Thomas Kozo, Wachovia Securities, LLC, and Robert Alan Wolter, Respondents (FINRA Arbitration 09-04531, November 5, 2010). Claimant Shoultz ultimately sought $64,155.00 in compensatory damages; $20,000.60 in punitive damages; $11,562.00 in interest; plus various costs and fees.
In keeping with the nature of these FINRA public customer arbitrations, the Decision merely describes the underlying dispute as involving "unspecificed" transactions and/or securities.
Respondents generally denied the allegations and asserted various affirmative defenses, and sought the expungement of this arbitration from the Central Registration Depository (CRD) records of Respondents Joshua Jason Billauer, Ralph Thomas Bryan, Christopher Thomas Kozo, and Robert Alan Wolter.
Arbitrator's Decision
The sole FINRA Arbitrator denied all of Claimant's claims.
The FINRA Arbitrator denied the expungement of the CRD records of Respondents Billauer, Bryan, and Kozo.
Respondent Wolter's Expungement
The Arbitrator recommended the expungement of all reference to the arbitration from Respondent Wolter's CRD record. The Arbitrator found that Claimant's claim was factually impossible or clearly erroneous as against Respondent Wolter because Wolter was not involved in the alleged investment-related sales practice violation, forgery, theft, misappropriation, or conversion of funds. The Arbitrator determined that Respondent Wolter was not employed at the branch at issue in this matter at any time during 2007 through 2009 when Claimant had her account at the firm. Further, Wolter had no oversight responsibility for the branch where Claimant had her account and no oversight responsibility for the other named Respondents during the time Claimant had her account at Wachovia Securities. LLC. Succinctly, the Arbitrator found that Respondent Wolter had no direct or indirect involvement with the Claimant or Claimant's account
Pursuant to Notice to Members 04-16, Respondent Wolter must obtain confirmation from a court of competent jurisdiction before the CRD will execute the expungement directive. Unless specifically waived in writing by FINRA. parties seeking judicial confirmation of an arbitration award containing expungement relief must name FINRA as an additional party and serve FINRA with all appropriate documents.
Bill Singer's Comment: Among the more common questions that stockbrokers ask me is "Can I be named in a lawsuit or arbitration even if I didn't do anything?" Now, to be fair, most of those questions are somewhat naive and little more than self-denials -- the stockbroker is typically putting a spin on what he or she did wrong. Not all brokers are saints. However, just as often, the respondent registered person is convinced that whatever happened was appropriate. Hence, the pissing contest that is most lawsuits begins.
Of course, let's not forget that not all public customer Claimants are saints either. Many industry respondents get caught within the spray of so-called shotgun pleadings in which a Claimant will simply aim at every visible target, even if there is little or no merit to the claim against that individual. Sort of how a dolphin must feel when caught in the tuna fisherman's net. In the case of Respondent Wolter, he was not employed at and had no oversight responsibility at the branch during the relevant time when Claimant's account was there. And, umm, he was named exactly why?
So, notwithstanding your biases against Wall Street or your roll-of-the-eyes when someone might suggest that there are, indeed, some innocent folks in the securities industry, just keep in mind that in at least one case (this one) an individual with no direct or indirect involvement with a public customer Claimant was named as a respondent -- and exoneration had to wait until over over a year from the date the Claim was filed. Also, if Wolter wants to obtain court confirmation, he may have to dig into his own pocket to pay a lawyer to accomplish that goal.