Broker-Dealer Defense

Our firm has defended broker-dealers in hundreds of litigation and arbitration matters.  We represent large broker-dealers, individual brokers, and “apex” employees in matters ranging from suitability to federal securities claims.   We have handled such claims through multiple market cycles, from the dot com bubble through the adverse market conditions of 2007-2009.  We have significant knowledge of investment products, compliance issues, supervision, FINRA rules, and sponsors.   We also have handled broker-dealer claims nationally, and as a result, we know many of the firms and attorneys who file investor claims in FINRA, and have arbitrated claims against those firms.  In short, we know this area of law and are regularly contacted by national and regional broker-dealers to represent them in everything from routine small-dollar, single-investment cases, to multi-million dollar multi-party claims.  In recent years, we have represented firms in cases involving non-conventional investments, like REITs, TICs, mortgage loan pools, and hedge funds.  We have a network of well-qualified experts whom we call upon to provide us and our clients with early evaluation of both economic loss, and analysis of standard of care issues.  Our attorneys also regularly present risk seminars to clients concerning best practices to avoid litigation.

Recent Successes

Successfully defended national broker-dealer in a FINRA arbitration filed by a claimant seeking over $1,000,000 in connection with limited partnerships.  Successfully prosecuted motion to dismiss pursuant to FINRA six-year eligibility rule, all claims dismissed.

Defended national broker-dealer in a high-dollar FINRA arbitration related to limited partnerships and REITS.  After three days of arbitration, arbitration panel dismissed all claims and ordered the claimant to pay our client $20,000 in costs and fees.

Defended national broker-dealer and broker against $1,500,000 claims.  After multi-day arbitration hearing, arbitration panel dismissed all claims and awarded $10,000 costs to our clients.

Represented national broker-dealer in a FINRA arbitration related to complex options strategy. After arbitration, all claims were dismissed and the claimant was ordered to pay $25,000 in costs and fees.

Represented a securities broker who was sued by a wirehouse firm for non-payment of $94,000 on a promissory note. The case settled with payment of $50,000 to our client by the wirehouse.

Represented terminated registered representative who was sued by wirehouse firm for $420,000 plus interest accruing on a promissory note. Obtained arbitration award resulting in a net award of $796,000 in favor of our client and reformation of Form U5.

Defended claims stemming from losses in DBSI investment.  After four day hearing, all claims were dismissed and panel determined that claim was brought for an improper purpose.

Successfully defended an independent broker-dealer in a series of cases involving losses from investments “sold away” from the broker-dealer by a former registered representative. The loss in any one of the cases would have caused the broker-dealer to cease operations.

Defended independent broker-dealer in claims against claims in excess of $40,000,000 brought in numerous forums by dozens of claimants.  This was a “bet the company” situation for our client.  The firm had limited resources and very limited insurance coverage. Through litigating some cases to successful resolution, settling of a class action resolving most claims, and using mediation or other alternative dispute resolution means to resolve others, we were able to protect our client and its shareholders from the ultimate business risk.

Defended independent contractor broker-dealer in jury trial related to selling away claims. The jury found for our client and awarded nothing to the plaintiffs.  We later represented the same client in bench trial in federal court in the Northern District of California. After the court granted partial summary judgment for the firm, we successfully defended the case at trial. The court found that the firm was not liable for the acts of its former registered representative outside the course and scope of her relationship with the firm.

Represented regional broker-dealer firm in selling away case in California state court. Obtained summary judgment for the firm, despite the fact that the plaintiff was a customer of the firm, on the grounds that the investment that was sold away, was not available through the firm, and that the firm had no duty to supervise the undisclosed outside activities of its registered representatives.