In a recent FINRA customer arbitration, about the best that the Claimant could muster was that the hearing was fair but not satisfactory. And for good reason -- much of which was apparently the customer's fault. In the end we emerge shaken but not stirred and we cry "uncle."
Case in Point
In a FINRA Arbitration Statement of Claim filed in February 2022, public customer Claimant Bonds representing himself pro se asserted that "he did not receive gains from trades that Claimant alleges he made;" and he sought $309,328.03 in compensatory damages plus punitive damages. In the Matter of the Arbitration Between Napoleon James Bonds, Claimant, v. TradeStation Securities, Inc., Respondent (FINRA Arbitration Award 20-04075) https://www.finra.org/sites/default/files/aao_documents/22-00487.pdf
FINRA member firm Respondent TradeStation Securities generally denied the allegations and asserted affirmative defenses.
Howsabout Some Clarification?
If you're playing along at home, imagine that you're Respondent TradeStation, and, hmmmm, our customer is suing us for gains he did not receive . . . and from trades that he made . . . and, geez, like, y'know, what trades and how much in unreceived gains we talkin' about here?
All of which likely explains why Respondent sought clarification about what trades and how much in gains; and, in response, why the FINRA Arbitration Panel ordered on November 1, 2022, that Claimant to file a "clarified Statement of Claim, with supporting documentation."
Stalled Discovery
On top of an allegedly unclarified Statement of Claim, Respondent moved to compel Discovery and impose sanctions for Claimant's likely non-responsiveness. On January 4, 2023, the Panel granted Respondent's Motion and sanctioned Claimant with a $600 Discovery-Related Motion Fee plus $500 in 'fees. Moreover, the Panel ordered Claimant to fully discharge his Discovery obligations and to file the previously ordered Clarified Statement of Claim. Claimant was ordered to fully comply by January 24, 2023.
A Man's Gotta Know His Limitations
As you may have anticipated, Claimant didn't fully comply with the Panel's orders, and we pick up the tension on April 20, 2023, via an Order and Revised Order:
The hearing in this matter is scheduled for April 25. To date, Claimant has not complied with any of the Panel's orders, has failed to file a more definite statement of claim, has not produced the required discovery and has not paid the ordered $500.00 in sanctions. Pursuant to the Panel's request, Respondent filed a motion for summary judgment noting that it should not be put to the expense of a hearing. Claimant made no response. The Panel agrees that we should limit the Respondent's need to prepare for a hearing. Therefore, the hearing on April 25 shall be limited as follows: Claimant is precluded from submitting any documentary evidence because he failed to comply with his discovery obligations. He may testify for up to 1 hour, and Respondent may cross-examine. All evidence supported by affidavit in Respondent’s Motion for Summary Judgment will be considered admitted and Respondent will be required to present only the affiant and only if Claimant appears. Claimant will have up to one hour to cross-examine the affiant. If Respondent wishes, it may introduce the affiant with a brief direct examination. If Claimant does not appear, the Panel will enter an Award against Claimant with prejudice. All costs will be awarded against Claimant. The Claimant can avoid the award of hearing costs by dismissing his claim with prejudice by April 24.
Award
The FINRA Hearing Panel rendered the following determination:
1. Claimant’s claims are denied in their entirety. Prior to the hearing, the Panel had limited Claimant to testifying in support of Claimant’s claim; no documents could be admitted because Claimant failed to comply with discovery, failed to comply with the Panel’s Order requesting a more definite Statement of Claim and did not comply with the Panel’s Order for Sanctions. Claimant was also permitted to cross-examine Respondent’s witness and to make closing statements. Because Claimant was pro se and not required to register for the Portal, FINRA emailed and mailed all documents to Claimant. In addition, FINRA would FedEx some Orders to Claimant in the case, including the Panel’s Order for Sanctions. Also, FINRA attempted to assist Claimant to connect to the hearing, which Claimant was able to do by telephone and apparently also via Claimant’s computer at least for part of the hearing. Claimant agreed that Claimant had a fair hearing but asserted that Claimant was unsatisfied with FINRA.
2. Any and all claims for relief not specifically addressed herein, including any requests for punitive damages and attorneys’ fees, are denied.
Bill Singer's Comment
For starters, what a great name! Napoleon James Bonds!!
One part Napoleon Solo:
One part, Bond, James Bond:
One part, Gary US Bonds:
Then there's that wonderful bit of hamstringing done by a clearly perturbed FINRA Arbitration Panel. Ya gotta love all the knots these arbitrators tied around Claimant Bonds by limiting his own testimony to supporting his claim AND not admitting any documents into evidence. I mean, other than that, didn't seem like there were any hard feelings, right? As to the source of the Panel's ire, well it's somewhat set out as:
[F]INRA emailed and mailed all documents to Claimant. In addition, FINRA would FedEx some Orders to Claimant in the case, including the Panel’s Order for Sanctions. Also, FINRA attempted to assist Claimant to connect to the hearing, which Claimant was able to do by telephone and apparently also via Claimant’s computer at least for part of the hearing. . . .
The coup de grace for me was this lovely summary:
Claimant agreed that Claimant had a fair hearing but asserted that Claimant was unsatisfied with FINRA.
