After a 5-day live FINRA arbitration, a FINRA Panel unanimously denied all claims for monetary relief to a registered representative who claimed that his registration was wrongfully terminated for failing to adhere to firm and industry “know your customer” rules. The firm was represented by WSSLLP Texas Managing Partner Martin Schexnayder and Associate Turner Johnston. The issue was whether the registered representative should have conducted further due diligence before attempting to open an account at the firm with an allegedly fraudulent 500 million Euro bond. Because the firm determined that the registered representative failed to recognize multiple “red flags” before opening an account with the bogus security, the firm terminated his registration. The representative sued for lost earnings of almost $5 million and also sought expungement of the termination on his U-4 as well as almost $150,000 in attorneys fees. In a unanimous decision, the 3-member Panel denied the requested monetary relief and expungement, and only granted the Claimant very limited injunctive relief that the firm did not oppose in the first place. WSSLLP congratulates its Texas trial team on this significant win.
Aug 9, 2021