By Harry A. Jacobowitz, Esq. The three-member FINRA arbitration panel rejects liability against a clearing broker that facilitated trading in fraudulent securities. The 33-page Award, Cordova Armijos v. Raymond James & Associates, Inc., FINRA ID No. 18-02934 (Miami, FL, Nov. 1, 2023), includes 10 pages of explanation, issued after 305 evidentiary hearings, 93 witnesses, the Panel’s review of more than 10,000 exhibits, and six days of oral argument. All quotations below are from the Award. Parties and Allegations The Second Amended Complaint increased the number of claimants (requiring a tw ..read more

By Harry A. Jacobowitz, Esq. The Award, Inlow v Barrows, FINRA ID No. 22-01360 (Los Angeles, CA, Oct. 30, 2023) explains why it holds two brokers liable to the customer, but rejects liability against a third one and finds no liability under some causes of action. The Claimant, Ronald J. Inlow (“Inlow” or “Claimant”), filed the arbitration against the three brokers, Michael Barrows (“Barrows”), Eric J. Ludovico (“Ludovico”) and Mark Stewart (“Stewart”), but not against any broker-dealer, alleging: “violations of federal securities laws; violations of California securities laws; violations of C ..read more

By George H. Friedman, SAA Publisher & Editor-in-Chief The Supreme Court has granted Certiorari in another arbitration-related case. Coinbase v. Suski, No. 23-3, was one of the  arbitration-centric cases at SCOTUS referenced in SAA 2023-36 (Sep. 21) and in our recent blog post, First Monday in October Coming Soon: Some Arbitration-Centric Cases Worth Following. Past Reporting We reported as follows: Recall that we reported in SAA 2023-25 (Jun. 29) and blogged on June 23 that the Supreme Court had decided Coinbase, Inc. v. Bielski, No. 22-105, ruling mostly along ideological lines tha ..read more

By George H. Friedman, SAA Publisher & Editor-in-Chief On the heels of the October 16 effective date of a number of rule amendments affecting the expungement of customer dispute information, PIABA and its foundation have issued an updated report on expunging customer dispute information from the Central Records Depository (“CRD”). As we reported in SAA 2023-15 (Apr. 20), the SEC approved the final version of SR-FINRA-2022-024, which makes substantial reforms to the process for expunging customer dispute information from brokers’ CRD records and profoundly limits the ability of brokers to s ..read more

By George H. Friedman, SAA Publisher & Editor-in-Chief FINRA’s proposal to amend the non-attorney representation rules has been published in the Federal Register. Comments are due November 3. As we were putting together SAA 2023-39 (Oct. 12) came word that FINRA had proposed changes to its non-attorney rep rules. Proposal in a Nutshell In brief: the authority on October 5 filed SR-FINRA-2023-013, Proposed Rule Change to Amend the Codes of Arbitration Procedure and Code of Mediation Procedure to Revise and Restate the Qualifications for Representatives in Arbitrations and Mediations. The te ..read more

By Harry A. Jacobowitz, Esq. October 16, 2023, the effective date of a number of rule amendments affecting the expungement of customer dispute information, approaches, we thought it was time to summarize the proper procedure for expunging customer dispute information from FINRA’s Central Records Depository (CRD) under those revised rules. As we reported in SAA 2023-15 (Apr. 20), the SEC approved the final version of SR-FINRA-2022-024, which makes substantial reforms to the process for expunging customer dispute information from brokers’ CRD records and profoundly limits the ability of brokers ..read more

By George H. Friedman, SAA Publisher & Editor-in-Chief FINRA Dispute Resolution Services (“DRS”) has posted case statistics through August, with trends continuing to show a comparatively strong year in arbitration filings – especially industry cases – and a continued drop-off in mediations. Headlines We offer these headlines: 1) overall arbitration filings through August – 2,181 cases – are up 27% for the year (was plus 30% in July); 2) cumulative customer claims increased 15% (was plus 19% last month); 3) industry arbitration filings were up 48% (was up 47 in July); and 4) the long-term d ..read more

By George H. Friedman, SAA Publisher & Editor-in-Chief The Supreme Court will be back in session on October 2. Here are some arbitration-centric cases worth tracking, as suggested by SCOTUSBlog. Certiorari Petitions this summer were filed in matters involving arbitration. We offer a primer on those cases worth following, as suggested in SCOTUSBlog’s “Petitions We’re Watching” section. Argent Trust Company v. Harrison, No. 23-30: The July 7 Petition identifies the question presented in this case as: “Whether a participant in a plan governed by ERISA who asserts statutory claims under that ..read more

By George H. Friedman, SAA Publisher & Editor-in-Chief The SEC has approved FINRA’s rule change proposal to implement recommendations resulting from the outside investigation of allegations that the arbitrator selection process was rigged. We reported in SAA 2023-01 (Jan. 5) that, on the eve of the year-end holiday break, FINRA had filed a rule change proposal that would implement recommendations resulting from the outside investigation of allegations that the arbitrator selection process was rigged. The SEC approved the rule filing on September 7. Borrowing heavily from past coverage, we ..read more

By George H. Friedman, SAA Publisher & Editor-in-Chief Relying on recently-announced Eleventh Circuit precedent — that the grounds set forth in FAA section 10 are the sole basis for challenging “foreign” awards under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“UN Convention”), where the arbitration took place in the United States – the Court finds that the Arbitrators’ alleged lack of complete disclosure did not warrant Award vacatur. An issue dividing the Circuits and some state courts is the grounds for challenging awards under the UN Convention. The vi ..read more