Securities & Investments Professional Liability

We obtained a defense verdict in a FINRA arbitration where the claimant donated approximately $600,000 to a donor advised fund in 2012 and took a tax deduction. The claimant alleged that the donor advised fund was mismanaged and lost approximately $140,000 in value in 2022. We defended the fund’s managers in the case based upon the claimant’s lack of standing once the funds were donated. Further, we presented evidence through the respondent’s testimony that the account was managed in accordance with the goals and objectives set for the account. In addition, we presented evidence that the account was overall profitable and performed better than the S&P 500 index during the relevant time period.

Defense award obtained on behalf of our client, a registered investment advisor, in a FINRA arbitration involving alleged mismanagement and lack of transparency concerning a Donor Advised Fund. The arbitration panel denied the claims in their entirety and recommended expungement of the claim from our client's registration records.  

We secured an Appellate Division decision affirming the trial court’s order dismissing a fraud and fraudulent concealment case filed against various attorneys and broker dealers. In its decision, the Appellate Division agreed with the trial court’s orders and opinions dismissing the case based on entire controversy, collateral estoppel and litigation privilege grounds. In this comprehensive decision, the Appellate Division held that the plaintiff’s claims were mirrored claims that had been fully litigated in a prior proceeding, where our clients either represented the litigants in the first case or were directly involved in the first case as defendants.

We obtained a defense award on a six-week FINRA hearing where our client, a General Agent, faced an alleged defamation/conversion/wrongful termination claim. The claimants contended that our client not only wrongfully discharged them after discovering their involvement in a bank-owned life insurance transaction, but also converted their trails and commissions, and defamed them on their U-5 form published through FINRA BrokerCheck. Damages totaling $15 million and punitive damages were sought by the three claimants. While the panel awarded $8 million in damages against the firm they were affiliated with, we obtained a defense award on all counts and dismissal of all claims for punitive damages on behalf of our General Agent client.

We won a defense verdict for a financial advisor in a FINRA arbitration over claims of unauthorized trading and breach of fiduciary duty. Defense award in a binding FINRA arbitration in Columbus, Ohio on behalf of a financial advisor. The Claimant alleged unauthorized trading and breach of fiduciary duty in connection with individual stock trades. The Claimant further alleged breach of fiduciary duty in relation to the financial advisor’s recommendation that the account be changed from a commission based to an advisory fee-based account.

A FINRA arbitration panel recommended the expungement of a customer complaint from a financial advisor’s public record.  The complaint involved allegedly unsuitable alternative investments and an overconcentration of alternative investments in the customer’s portfolio.

We obtained dismissal of a Financial Industry Regulatory Authority (FINRA) case in which the claimant was seeking in excess of $200,000 in damages. The dismissal was based upon FINRA’s rule setting forth a six-year eligibility period in which a claim may be arbitrated. The claimant made the investments at issue in 2015 but did not file his Statement of Claim until 2022. Claimant’s counsel argued that the “trigger date” for eligibility was in 2018, which is the date the claimant learned of an alleged Ponzi scheme involving the investments. We argued that the eligibility period began on the date of the investments in 2015. The three-member panel of arbitrators unanimously agreed with our position. Motions to dismiss are rarely granted because FINRA encourages its arbitrators to allow claimants the opportunity to present their case on the merits at an evidentiary arbitration proceeding.

A FINRA arbitration panel recommended the expungement of a customer complaint from a financial advisor’s public record.  The complaint involved an allegedly unsuitable sale of an equity indexed annuity with a nine-year surrender period.  

A FINRA arbitration panel recommended the expungement of two separate customer complaints from a financial advisor’s public record.  Both complaints involved allegedly unsuitable sales of alternative investments.

A FINRA arbitration panel granted a financial advisor and his supervisor’s motion to dismiss a FINRA arbitration on the basis that the Claimant previously brought multiple claims regarding the same securities related dispute against the broker-dealer, who was not a party to this arbitration.  

A FINRA arbitration panel recommended the expungement of a customer complaint relating to allegedly unsuitable investments in oil and gas investments that declined during the early months of the COVID-19 pandemic.  

Resolved a FINRA matter involving four private placement investments for a portion of the costs. ​At issue were alleged losses exceeding $200,000. Leveraging the panel’s favorable decision on an earlier Motion for Eligibility (untimeliness), we convinced claimants’ counsel of the futility of proceeding further. Claimants’ counsel agreed to resolve the case for his filing costs only, split among three respondents.

This was a high-stakes FINRA arbitration case, motion to vacate the defense award in federal district court, and a precedential decision in the First Circuit following oral argument. The claimant retired early with a pension and 401(k) and rolled the funds into a securities account in 2002. On a tip from a friend, he invested his nest egg with a registered representative who years later was charged by the SEC and convicted of securities violations. Through the registered representative’s bad advice and improper conduct between 2002 and 2016, the claimant’s retirement account was drained to zero, though the total amount was distributed to the claimant himself. The claimant sued the registered representative and the rep’s former broker-dealers through whom the representative was affiliated (prior to his residency with the Bureau of Prisons). The FINRA arbitration panel granted a complete defense award in favor of our broker-dealer client, seeing no improper or negligent conduct on the broker dealer’s part, and finding all improper conduct of the registered representative to be outside the scope of his affiliation with the broker-dealer. The claimant then moved to vacate the award in favor of our broker-dealer client in federal district court in Boston, which was denied. He then appealed that decision to the Court of Appeals for the First Circuit. In both courts, Shane briefed and orally argued the case. The First Circuit handed down a published opinion even stronger than the district court victory, adopting word-for-word many of the arguments Shane made so as to secure confirmation of the FINRA award in its entirety for the benefit of our client.

We were successful on a motion to dismiss an action against a financial planning and investment firm and its employee, a certified financial planner, filed in Federal District Court in Maryland. The plaintiffs claimed that the financial planner advised them to purchase a life insurance policy that was indexed to the stock market and that he made certain representations about the expected return on investment, which never came to fruition. Instead, according to the plaintiffs, the value of the policy plummeted, and they lost significantly on their investment. The court dismissed all claims against the firm, agreeing that the company could not be liable for the alleged advice given to the plaintiffs by the financial planner, inasmuch as the firm did not exist at the time the alleged advice was given. Also, the court dismissed a claim for breach of fiduciary duty against the financial planner, agreeing that both federal and state courts in Maryland do not recognize a standalone cause of action for breach of fiduciary duty when only monetary damages are sought. As well, the court dismissed a conversion claim against the financial planner, concluding that the plaintiffs failed to allege sufficient facts to plausibly demonstrate the financial planner wrongfully exercised ownership or dominion over their finances.

Defense award in a binding FINRA arbitration in Boca Raton, Florida on behalf of a broker-dealer. ​The broker-dealer was sued in arbitration by two retired broker claimants who sought $5 million in past and future benefits, under a retirement program that paid override fees to retired brokers on books of business they had developed decades ago.

Defense verdict after a four-day jury trial in northeastern Pennsylvania on behalf of a registered investment advisor and a securities broker dealer who were sued by their former client for investment losses in alternative investments.

Obtained a dismissal on a directed verdict in a FINRA arbitration in New York. The defense represented a broker-dealer in a dispute with its former customer regarding the unauthorized use of her account information. The claimant was a customer of one of the broker-dealer’s New York branches, where her ex-husband also worked as a broker.