Labor & Employment Law

FINRA Arbitrators Take a Bite Out of Claimant's Counsel

By Dobin & Jenks

I have been handling securities arbitrations for over 20 years. Every once in a while, the arbitrators saw the other side's case for what I believed it was -- nonsense. This has happened a few times over the years.

I heard about a case that was being tried before FINRA in Boca Raton. The premise of the claim seemed flimsy to begin with. Money had been stolen by a broker and returned by the brokerage firm, Merrill Lynch to the customer. The claim appears to be for, in part, lost investment opportunity. The broker did not appear during the arbitration hearings. At a point in time, she said she was not appearing because she was "awaiting sentencing." Those are usually not helpful words.

But it appears that Merrill did the right thing and paid back the customer the money that was stolen. But in something that I cannot recall ever seeing before, there is a nearly two page recitation of the procedural issues in the case. There are issues dealing with amendment of pleadings, appearance of witnesses and the possiblity of depositions. This case was war.

The arbitrators sided with Merrill Lynch and against both the Claimant and her broker. The panel awarded both the Claimant and Merrill Lynch their attorneys' fees against the broker. But that's not the unusual part.

The unusual part is the assessment of the arbitration costs jointly and severally against the Claimant and her lawyers. That is very rare. In case anyone reading the award thought that the panel was happy about this case, the assessment of costs against the lawyers pretty much puts that notion to rest.

Some days, the dog bites you and some days you bite the dog. I don't know who plays which role, but somebody got bit.

That's the view from The Law Planet, Jupiter, Florida.

Full post as published by The Law Planet Blog on November 11, 2008 (boomark / email).