Favorable Arbitration Ruling Overturned by Oklahoma Court
Wednesday, September, 17, 2014
Despite coming out the victor in his arbitration proceeding against a brokerage firm, investor Steven Admire sought to overturn the decision. His reason was simple: He felt the $9,900 award ordered by the arbitrator was much too small. In a surprising and very rare move, a court agreed and vacated the arbitration ruling made by the Financial Industry Regulatory Authority (FINRA) in the case.
Mr. Admire, who claims losses in excess of $1.5 million, had sought to have arbitration thrown out altogether and have his claim settled in court, but the judge did not go that far. Mr. Admire claims that the brokerage knew his funds were limited but continued to accept trade orders even when his checks bounced. Mr. Admire argued the brokerage had a responsibility to alert him to the situation and stop trading on his behalf, but did not do so. The brokerage argued that Mr. Admire wanted them to “save him from himself,” which was not their responsibility.
After the arbitrator’s decision, Admire sued on the grounds that the ruling was grossly insufficient, and that the arbitration panel did not disclose inappropriate conflicts of interest in the case. Oklahoma County District Judge Barbara Swinton ordered a new arbitration without giving any reasons for her decision.
Mr. Admire wishes to avoid another FINRA hearing altogether, but it is traditionally very difficult to take a securities case away from FINRA and its mandatory arbitration procedures. Mr. Admire’s lawyers stated they were waiting to see if the brokerage appealed the decision before making any further moves.