At the end of the first quarter of 2018, FINRA Dispute Resolution was reporting a 37% climb in new filings of customer cases (689 v. 502) and a 58% increase in intra-industry cases (463 v. 293), compared to the same period of 2017. We commented in our review of the March statistical report from FINRA-DR, […]

Read More»

By Ben Suter *A clause of a settlement agreement that protects a party against a third party who “successfully asserts” a claim requires more than voluntary settlement of that claim. **There is no rule against pleading unjust enrichment as an alternative cause of action in a complaint alleging breach of contract. Long Beach Securities Corp. […]

Read More»

By Christopher G. Lazarini *Whether a statement would give an investor a false impression is generally a question reserved for the fact-finder. **A duty to speak arises when necessary to make existing statements not materially misleading. ***To prove a causal link between an alleged fraud and economic harm suffered, a plaintiff must distinguish the alleged […]

Read More»

How much of the forum costs each party must pay is a matter for the discretion of the Arbitrators. Our second annual analysis of cost assessments in Customer-Member Awards (see SAA 2016-21 (May 31) for the original survey) once again reveals a decided tendency to favor customer claimants. A few words of explanation are in […]

Read More»

By Jill I. Gross *Where third parties’ criminal conduct is a foreseeable consequence of a broker’s negligent due diligence and misrepresentations, the broker may be liable for the injury to her clients caused by the criminal conduct, even if the broker was not aware of that misconduct. **A defendant’s admission in a guilty plea that […]

Read More»

In a narrow 5-4 decision split along ideological lines, the Supreme Court on May 21 held in Epic Systems Corp. v. Lewis, No. 16-285, that the Federal Arbitration Act (“FAA”) permits employers to use arbitration clauses containing class action waivers, notwithstanding the National Labor Relations Act’s (“NLRA”) protections of workers’ rights to act collectively. He may not […]

Read More»

By David C. Franceski, Jr. *Opinions are misleading only if not truly held, objectively false or the product of material omissions. **An alleged misrepresentation is not material if it does not change what the investing public already knows. Martin vs. Quartermain, No. 17-2135 (2nd Cir., 5/1/18). Dueling Experts Plaintiffs, purchasers of gold-mining defendant’s common stock, […]

Read More»

JONES v. AMERICAN PORTFOLIOS FINANCIAL SERVICES, INC., FINRA ID #17-01414 (Baltimore, MD, 4/13/18). This 20-page Award, involving a broker who became a beneficiary of his client’s Will, discusses at length both the claim itself and various issues that arose in the course of the proceedings. The Estate of Addie Belle Jones brought this claim against […]

Read More»

By Jack D. Ballard *Under Delaware law, a court interpreting an engagement agreement between an investment bank and a client must give unambiguous terms their plain meaning and may not use extrinsic evidence to vary the terms or to create an ambiguity. **Under Delaware law, corporate formalities may be disregarded only in exceptional cases. Centerboard […]

Read More»