Successful defense of broker-dealer client.
This was a high-stakes FINRA arbitration case, motion to vacate the defense award in federal district court, and a precedential decision in the First Circuit following oral argument. The claimant retired early with a pension and 401(k) and rolled the funds into a securities account in 2002. On a tip from a friend, he invested his nest egg with a registered representative who years later was charged by the SEC and convicted of securities violations. Through the registered representative’s bad advice and improper conduct between 2002 and 2016, the claimant’s retirement account was drained to zero, though the total amount was distributed to the claimant himself. The claimant sued the registered representative and the rep’s former broker-dealers through whom the representative was affiliated (prior to his residency with the Bureau of Prisons). The FINRA arbitration panel granted a complete defense award in favor of our broker-dealer client, seeing no improper or negligent conduct on the broker dealer’s part, and finding all improper conduct of the registered representative to be outside the scope of his affiliation with the broker-dealer. The claimant then moved to vacate the award in favor of our broker-dealer client in federal district court in Boston, which was denied. He then appealed that decision to the Court of Appeals for the First Circuit. In both courts, Shane briefed and orally argued the case. The First Circuit handed down a published opinion even stronger than the district court victory, adopting word-for-word many of the arguments Shane made so as to secure confirmation of the FINRA award in its entirety for the benefit of our client.