Brokers Seek to Vacate $19-Mln Award Due to Napping Arbitrators on Zoom

Miller Stern Lawyers – 410-Law-Firm is currently investigating for individuals who may be victims of, and suffered damages and losses, due to stock market and financial abuses such fraud, mutual fund abuses, unsuitable mutual fund investments, failure to supervise, breach of fiduciary duty, overcharging , and unauthorized trading and elder abuse.

According to Advisors Hub and other sources, a pair of former J.P. Morgan Securities brokers have asked a court to nullify a high profile $19 million award issued last month by a Financial Industry Regulatory Authority arbitration panel.

A motion to vacate in U.S. District Court in the Southern District of Florida was filed alleging that the arbitration process “broke down” over the 43 hearing sessions as the arbitrators dozed off, failed to address a potential conflict and declined to admit an allegedly key piece of video evidence.

The award was tied to a claim for unauthorized trading and elder abuse in July 2019. It qualified for vacature under the narrow grounds provided by the Federal Arbitration Act because the arbitrators ‘exceeded their authority’ by refusing a request to postpone the hearing until it could be held in-person, they argued in the filing.

“Unfortunately, the unsuitability of this lengthy and complex case proceeding via Zoom was borne out by the flagrant inattention of the arbitrators,” according to the claim. “This award…was the product of a broken and biased process which favored the rapid conclusion to petitioner’s case over all other considerations, including fairness, impartiality, and Finra’s own rules.”, as reported in the filings.

While the motion makes a novel argument in the Zoom era, this is an uphill battle to convince a court that the arbitrators did not have the authority to give the order, or that the virtual forum worked against them uniquely.

Their motion to vacate argued that the virtual arbitration forum deprived them of the ability to properly subpoena certain witnesses, and also accused arbitrators of undisclosed conflicts and possible biases, according to filings.

As evidence of the panelists’ lack of impartiality the brokers said they failed to admit evidence, including 49 minutes of video, in which the client allegedly admitted she had authorized the transactions, including one large multi-million dollar private equity investment.

The brokers’ petition described the client as an “exceptionally wealthy woman” who lives in Bal Harbor, Florida and has a net worth over $100 million, most of which she inherited in 1984 when her husband passed away.

Miller Stern Lawyers, LLC, a Baltimore Securities Law firm, currently represents investors for claims of investment losses from unauthorized trading, over concentration, irregular options trading, margin and unsuitability claims, broker fraud, securities fraud, securities litigation and other broker and broker/dealers for investment losses and fraud.  If you or anyone you know have experienced investment losses from the actions above or other situations, please call 410-LAW-FIRM ( 410-529-3476 ) or fill out the contact us form for a no cost consultation and evaluation of your claim


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