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Raymond James Rep Can't Get No Non-Attorney Representative To Not Make No FINRA Arbitration Proffer
January 2, 2020
In today's featured FINRA Arbitration case, we have the double-negative issue of a respondent not not being not allowed to not speak. Although the associated person Respondent's testimony was not allowed by the arbitrators, he was, in fact, not allowed to not testify through the brokerage firm Claimant's non-attorney representative, who is likely not not his representative but, in fact, not the Claimant firm's representative, who, as it turned out, was allowed to not not speak. Oh and another thing, although the Panel says it would not have mattered if the non-attorney rep had not spoken about what he was not supposed to not speak about, the Panel would not have changed its Award had it not not heard all of the not allowed information!
Case in Point
In a FINRA Arbitration Statement of Claim filed in November 2018, FINRA member firm Raymond James asserted breach of contract attendant to the non-payment by associated person Respondent Clark attendant to an August 2017 promissory note that allegedly became due upon Clark's separation from the firm. Claimant Raymond James sought $206,000, interest, fees, and costs. In the Matter of the Arbitration Between Raymond, James & Associates, Inc., Claimant, v. Gregory D. Clark, Respondent (FINRA Arbitration Statement of Claim 18-04011)
finra.org/sites/default/files/aao_documents/18-04011.pdf
Don't Speak
Respondent Clark did not file a Statement of Answer or a Uniform Submission Agreement. In February 2019, Claimant Raymond James moved to bar Clark's presentation of defenses and facts, which the FINRA Arbitration Panel granted without prejudice to Clark's opportunity to appear and move for relief. In May 2019, Clark moved for reconsideration of the Panel's Order, which was opposed by Respondent and denied by the Panel.
Award
The FINRA Arbitration Panel found Respondent Clark liable and ordered him to pay to Claimant Raymond James $206,000 in compensatory damages with interest. The Panel (composed of two Public Arbitrators and one Non-Public Arbitrator) issued this "Findings of Fact":
On the record at the hearing, Respondent endeavored to offer his own testimony. Claimant objected. Pursuant to the Panel's Order barring Respondent from presenting any defenses and facts and in keeping with the fact that Respondent never filed a Statement of Answer, witness list, or exhibit list, Claimant's objection was sustained. Respondent's representative was permitted to make a proffer of the testimony Respondent would have presented had Claimant's objection been overruled. In brief, that proffer was mainly as to the circumstances of the promissory note and settlement and intended to prove that it was inequitable to permit Claimant to both retain Respondent's book of business and also enforce the promissory loan agreement. Respondent's representative was also permitted to provide opening and closing statements and cross-examine Claimant's witness.The Panel notes that even if there were not valid procedural reasons to bar the presentation of counterclaims and defenses, the proffered evidence would not have changed the Panel's ruling on the merits. The parties' settlement agreement of August 25, 2017 was entered after Respondent had advice of counsel, it provided Respondent with a discount, and it contained a general release in favor of Claimant.
Bill Singer's Comment
Apparently, in August 2017, Clark and Raymond James entered into a settlement agreement whereby (I'm guessing) Clark agreed to a schedule of payments pertaining to the balance-due on a Promissory Note. In negotiating said settlement, Clark "had advice of counsel" -- so, at some point, Clark had retained a lawyer. About a year after entering into the settlement, Clark likely failed to make the requisite payments, which prompted Raymond James to file its Statement of Claim.
In response to Raymond James's Statement of Claim, it seems that Respondent Clark did not hire a lawyer to defend him against his former employer's allegations; moreover, Clark did not file a Statement of Answer or a Uniform Submission Agreement. In response to Claimant Raymond James' motion, the FINRA Arbitration Panel barred Respondent Clark from presenting any defenses and facts; however, he was given an opportunity to appear at the arbitration hearing and "move for relief." As to that hearing, here's what the FINRA Arbitration Decision asserts concerning the parties and their legal representation:
For Claimant Raymond, James & Associates, Inc. ("Claimant"): Dominique E. Heller,Esq., Wiand Guerra King P.A., Tampa, Florida.Respondent Gregory D. Clark ("Respondent") appeared pro se.**Solely at the hearing, Jason Abraham, a non-attorney representative, appeared onbehalf of Claimant. Please see the Findings of Fact section of this award for additionalinformation.
So, according to the FINRA Arbitration Decision, non-attorney representative Jason Abraham appeared at the FINRA Arbitration Hearing on behalf of Claimant Raymond James.
I'm confused.
Clearly, the Decision asserts that Claimant Raymond James was represented by a lawyer and a law firm. On the other hand, the Decision does say that non-attorney representative Jason Abraham represented Claimant "solely at the hearing." Why the hell would Raymond James use a non-attorney representative at the hearing? As set forth in part in the FINRA Arbitration Decision:
[R]espondent's representative was permitted to make a proffer of the testimony Respondent would have presented had Claimant's objection been overruled. In brief, that proffer was mainly as to the circumstances of the promissory note and settlement and intended to prove that it was inequitable to permit Claimant to both retain Respondent's book of business and also enforce the promissory loan agreement. Respondent's representative was also permitted to provide opening and closing statements and cross-examine Claimant's witness.The Panel notes that even if there were not valid procedural reasons to bar the presentation of counterclaims and defenses, the proffered evidence would not have changed the Panel's ruling on the merits. The parties' settlement agreement of August 25, 2017 was entered after Respondent had advice of counsel, it provided Respondent with a discount, and it contained a general release in favor of Claimant.
What?
Respondent's representative? Respondent Clark is listed as appearing pro se. The only other representatives referenced in the FINRA Arbitration Decision are Claimant Raymond James's attorney and the firm's non-attorney representative. In setting out the parties representation, the FINRA Arbitration Decision appended an asterisk to the line pertaining to Respondent Clark and not to Claimant Raymond James. On the one hand, the Decision asserts that Raymond James was represented by Dominque E. Heller, Esq.; on the other hand, "solely at the hearing," the Decision asserts that non-attorney Jason Abraham "appeared on behalf of Claimant." How can Raymond James be represented both by a lawyer and a non-lawyer at the hearing? In fact, it seems that non-attorney Abraham appeared not on behalf of Claimant Raymond James but on behalf of Respondent Clark. Assuming that we have it right and that Abraham was Clark's non-attorney representative at the hearing, the FINRA Arbitration Decision asserts in part that:
[R]espondent's representative was permitted to make a proffer of the testimony Respondent would have presented had Claimant's objection been overruled. In brief, that proffer was mainly as to the circumstances of the promissory note and settlement and intended to prove that it was inequitable to permit Claimant to both retain Respondent's book of business and also enforce the promissory loan agreement. Respondent's representative was also permitted to provide opening and closing statements and cross-examine Claimant's witness.
A proffer of testimony on behalf of the Respondent by a non-attorney representative, who is listed as Claimant's non-attorney representative, and said proffer was permitted (despite the Panel having previously ordered that it not be given) because the Panel decided to entertain the proffer as if it had not not been overruled?
Wow -- that's an amazing amount of double negatives! Which brings to mind the mother of all double negative songs: