Friday, October 17, 2014

Customer Hit with $80,000 in Respondents' Attorney's Fees

It is not often that a public customer is forced to pay a respondent's attorneys fees, but in a recent FINRA arbitration, that is exactly what happened.

According to the description in the FINRA arbitration award it appears that a public customer, representing herself, filed a claim against UBS for unauthorized transactions, unsuitable recommendations, negligent supervision and violation of FINRA's conduct rules, requesting 2.75 million dollars in damages. UBS denied the allegations and requested expungement for the broker.

A hearing was scheduled, and the Claimant did not appear, and did not request an adjournment. Rather than dismissing the case, the Panel took the extra step of giving the Claimant an additional week to explain her non-appearance and why her claim should not be dismissed.

Claimant did not respond, and UBS filed a request for attorneys fees and costs.

The Panel granted the request, dismissed the complaints, awarded UBS $81,000 in attorneys fees and costs of $9,000, and expunged the matter from the broker's record.

A dramatic result, but one which brings home the point that FINRA arbitrations are a serious matter, and should be treated as such. 

Mark Astarita is a nationally recognized securities lawyer who has represented parties on over 600 securities arbitrations. If you have a question regarding a securities law issue, email your questions to