One of the headaches that broker-dealers and their supervisory personnel face concerns the errant broker who sells securities “off the books” without notifying his employer, a violation known as “selling away.” If the broker requests and receives approval for private securities transactions, his or her employer’s liability is clear, but, even when the broker-dealer has […]

By Burton W. Wiand A jury verdict that an employee was not subjected to retaliatory discharge is not against the weight of the evidence, where the employer presents unrebutted evidence that it eliminated the employee’s position as part of an overall financial-based restructuring. Wile vs. FINRA, No. 14-80218 (S.D. Fla., 4/30/15. The Suit, the Verdict […]

Over the past several months, we’ve reported on the Consumer Financial Protection Bureau’s (“CFPB”) review of mandatory predispute arbitration agreements “PDAAs”). In light of recent activity, we decided to offer this primer on the subject. CFPB’s authority under Dodd-Frank: To review, Dodd-Frank section 1414 bans outright PDAAs in residential mortgage contracts and section 1028 directs the […]

By Christopher G. Lazarini A consultant or intermediary who brings together parties who may be interested in a securities transaction, but who does not play an active role in effecting the transaction, may be a finder and not subject to broker/dealer registration requirements. Pransky vs. Falcon Group, Inc., Nos. 319266 & 319613 (Mich. App., 6/18/15). […]

By George H. Friedman* [This is a summary of the lead article in this month’s Securities Arbitration Commentator] Introduction As reported in the June 18th issue of the Securities Arbitration Alert, the Supreme Court of Alabama in a unanimous decision in J. Don Gordon Construction, Inc. and Western Surety Co. v. Brown, No. CV-10-901832 (Ala. […]

With five months of the year done, the dispute resolution forum’s case filings were running 27% below the same-period figures for 2014 and close-outs were down 7%. In 2013/2014, the new submissions were relatively stable volume-wise, but, in 2015, filings dropped, mostly, it seems, as a fall in the number of new customer claims occurred. […]

By Paul J. Dubow *An arbitration Award will be vacated if it requires a party to perform an illegal act. **An arbitration Award that orders a brokerage firm to transfer a security subject to a global lock will be confirmed, but the brokerage firm will not be required to execute the transfer until and unless […]

Karim v. Citi Bank, N.A. & Citigroup Global Markets, Inc., FINRA ID #14-00632 (Los Angeles, CA, 6/15/15). Here’s a “reasoned” Award; this one addresses a successful wrongful termination case (with suspicions of employment discrimination) by a former branch manager. Claimant Shahid M. Karim claimed that his former employers (collectively identified as “Citi” in the Panel’s […]

Rule 13204 does not prevent a broker-dealer from exacting a contractual waiver from its employees of the right to bring a class or collective action; such waivers are enforceable under the FAA and, as a consequence, the remaining individual claims of the employee are arbitrable under a broad agreement to arbitrate. Cohen vs. UBS Financial […]