Vogelbach v. Quincy Cass Associates, FINRA Arbitration Case No. 10-04022

Arbitration panel orders the plaintiffs (the claimants) to pay broker-dealer for “frivolous” claims.

An arbitration panel ordered two claimant investors to pay the broker-dealer respondent $75,000 in legal expenses. The panel called the investors’ claims “frivolous” and a “bad-faith abuse of the FINRA arbitration process.” The panel also ordered the claimants to pay $6,000 of the $7,200 in forum fees. In addition, the arbitrators ordered expungement of the case from the broker’s disciplinary record. The panel said that one of the claimants was “wealthy, financially sophisticated, and aggressive in his approach to investing" and the “causes of his losses were his own independent decisions and market risks.” Regarding the other claimant investor, the panel found “not a scintilla of evidence” was presented in the case to demonstrate that he had a contractual relationship with either of the respondents.

Case Law Alert - 3rd Qtr 2012