Wells Fargo Promissory Note Case Enters Its Second Decade of Litigation

2. Plaintiff claims that his Complaint in this instant matter "contained a certification pursuant to R. 4:5-1 which identified inter alia that the matters in controversy were the subject of two pending actions in the Appellate Division and one recently -- concluded arbitration under the auspices of the Financial Industry Regulatory Authority, Inc. ("FINRA"). 

3. Plaintiff makes reference to the matters in the Appellate Division without any indication what those claims are about or how they are relevant to the within matter.  

4. On March 24, 2015 Plaintiff contends that he filed a motion to extend time to file and serve an amended complaint. On April 10, 2014 this Court denied Plaintiff s motion

indicting [sic] on the Order, 

Case was dismissed for lack of prosecution on 3/27/2014. A motion to extend

discovery when no answer has been filed is improper. Movant has yet to file an Affidavit of Service and his telephone call to the Clerk does not suffice to protect his rights. Accordingly, the motion is denied and the matter remains dismissed. 

SIDE BAR: Hey, how are you? Me? I'm doing fine all things considered. Thanks for asking. Listen, I don't have any idea as to what NJSC was entertaining in terms of Sequeira's legal pleadings, motions, and assorted petitions. No . . . I'm not kidding. As best I can tell,, Sequeira was enmeshed in a FINRA arbitration. Then he seems to have filed a state court Complaint. As best I understand it (and, trust me, I don't), Sequeira failed to prosecute his Complaint, which was dismissed. Funny thing about "dismissed," it apparently doesn't mean what I think it does because it looks like there were two or three other motions floating around NJSC after the dismissal. Motions about a dismissed case? Okay, that's possible. Maybe a Motion for Reconsideration? That's as good a guess as I can conjure up, and, you know what, I'm gonna have to go with that but I may be wrong. On the other hand, wrong or not, I truly don't care at this point. Anyhow, thanks for dropping in here and why don't you meander on back into today's brilliant analysis of this oddball case.

Respondent is suspended from associating in any capacity with any FINRA member firm for his failure to pay an arbitration award. The suspension will automatically convert to a bar if he fails to provide sufficient documentary evidence to FINRA Regulatory Operations within 30 days after the date of this decision, showing: (1) he paid the award in full; (2) he entered into a written settlement agreement with Wells Fargo, and he is current in his obligations under the terms of the settlement agreement; or (3) he filed a bankruptcy petition in U. S. Bankruptcy Court pursuant to Title 11 of the United States Bankruptcy Code and the case is pending before the Bankruptcy Court (or the Bankruptcy Court has discharged the debt representing the award)

Respondent is suspended from associating in any capacity with any FINRA member firm for his failure to pay an arbitration award. The suspension shall continue until he provides sufficient documentary evidence to FINRA showing that: (1) he paid the award in full; (2) he entered into a written settlement agreement with Wells Fargo, and he is current in his obligations under the terms of the settlement agreement; or (3) he filed a bankruptcy petition in U. S. Bankruptcy Court pursuant to Title 11 of the United States Bankruptcy Code and the case is pending before the Bankruptcy Court (or the Bankruptcy Court has discharged the debt representing the award). 

Article VI, Section 3(b) of FINRA's By-Laws provides in pertinent part that FINRA may, upon written notice, suspend the registration of an associated person who fails to comply with an arbitration award when the person has not made a timely motion to vacate or modify the award, or when such a motion has been denied. 

In the expedited hearing of this matter, Sequeira conceded that the New Jersey court dismissed the suit he filed to vacate the award. Nonetheless, he insisted that the dismissal did not adjudicate the merits of his claims, and therefore the suit he had filed was still "pending" before the court.

The purpose of this decision is to make clear that the sanction imposed is not disciplinary in nature, but, consistent with other expedited proceedings instituted under FINRA Rule 9554, is "designed to influence Sequeira to comply with the arbitration award." Therefore, the sanction is modified as set forth below. 

In sum, we find that the specific grounds on which FINRA based Sequeira's suspension exist in fact, that the suspension was imposed in accordance with FINRA's rules, and that those rules are, and were applied in a manner, consistent with the purposes of the Exchange Act. Accordingly, we dismiss Sequeira's application for review.

[A] FINRA arbitration panel awarded Wells Fargo compensatory damages, plus interest, as well as attorneys' fees. In the August 5, 2014, letter notifying Sequeira of the decision, FINRA explained that it could suspend his registration if he failed to comply with the award. 

Sequeira did not pay the award. Instead, he filed in action in the Superior Court of New Jersey seeking to vacate the arbitration award. But because he failed to properly serve the summons and complaint on the defendants, the state court dismissed the action without prejudice for lack of prosecution on March 27, 2015. Thereafter, Sequeira unsuccessfully sought to have the case reinstated. ¹

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Footnote 1: In particular, Sequeira moved for an extension of time to file and serve an amended complaint, but the Superior Court denied his request. Later, the Superior Court denied Sequeira's motion to reconsider the denial of the motion for an extension of time, noting that the case "remains closed." Undeterred, Sequeira attempted to reinstate the action by serving his original complaint on Wells Fargo. On September 30, 2016, the Superior Court concluded that Sequeira failed to provide either good cause or exceptional circumstances for his failure to prosecute the action, and again stated that the case "remains closed." The Superior Court's orders were affirmed. See Sequeira v. Wells Fargo Advisors, LLC, Docket No. A-1995-16T1, 2018 WL 3018882 (N.J. Super. Ct., App. Div., June 18, 2018).

[A] party who does not comply with an award issued by FINRA may avoid suspension by demonstrating, inter alia, that he has filed a timely motion to vacate or modify the award and the motion has not been denied. See FINRA Regulatory Notice 10-31, 2010 WL 2712571, at *2 (effective July 2, 2010). Sequeira contends that this defense should have shielded him from suspension because, although the New Jersey Superior Court dismissed his action to vacate the award, it did so without prejudice, rather than "on the merits." 

We deny Sequeira's motion. Our Rule of Practice 470 provides that a "motion for reconsideration shall be filed within 10 days after service of" the challenged Commission action. Sequeira does not dispute that he was timely served with the March 2019 Opinion. As a result, the period for filing a motion for reconsideration expired approximately eighteen months before he sent his letter. Although Rule 470(b) permits parties to seek an extension of time to file a motion for reconsideration, such a motion must be made within 10 days of service of the determination at issue. Sequeira did not seek an extension of time during that 10-day period. Sequeira's motion for reconsideration of the March 2019 Opinion is thus untimely. 

It is therefore ORDERED that the motion for reconsideration of the March 2019 Opinion, filed by Keith Patrick Sequeira, is hereby denied. 

• FINRA
• Arbitration
• SEC
• Wells Fargo
• Promissory Note
• EFL
• OHO
• Remand
• Rule 9554
• 3Cir
• BrokeAndBroker
• Bill Singer