Los Angeles Team Secures Sanctions Award Against Claimant in Virtual FINRA Arbitration

Los Angeles, Calif. (September 2, 2021) – Los Angeles Partner Connie M. Fickel and Associate Hakop Stepanyan recently secured a favorable award including sanctions against the opposing party in an arbitration before the Financial Industry Regulatory Authority (FINRA). The underlying matter involved a succession planning dispute between two brokers, wherein the claimant asserted claims for anticipatory breach and breach of contract, defamation, intentional interference with contractual relationships, and invasion of privacy and dissemination of private information. The claimant sought in excess of $10 million in damages, but was awarded only $5,000. The respondent (Lewis Brisbois’ client) was awarded $10,000 in sanctions, for a net award of $5,000 in favor of the respondent.

During the arbitration hearing, which was held virtually, Ms. Fickel noticed that the claimant appeared to be reading off a script during his testimony in violation of the hearing's arbitration rules. He then denied doing so. Lewis Brisbois subsequently filed a motion for entry of sanctions against the claimant based on this misconduct. The arbitrators noted in their final award that "[t]hough the Panel does not have jurisdiction to award sanctions against counsel, the Panel believes that Claimant's counsel was largely responsible for this misconduct.

The unusual circumstances of this hearing and the final award were covered in an article by AdvisorHub titled "Lawyers Just Say ‘No’ to Zoom for Finra Arbitration Hearings," for which Ms. Fickel was interviewed.

Ms. Fickel is the chair of Lewis Brisbois' Securities Litigation & FINRA Practice and Co-chair of the firm's Professional Liability Practice. She represents investment advisors, registered representatives, accountants, actuaries, ERISA fiduciaries, lawyers, and insurance agents and brokers, and has successfully defended claims involving a variety of alternative investments, annuities, options, and other investment products and strategies.

Mr. Stepanyan is a member of Lewis Brisbois' Professional Liability Practice and has experience in financial services litigation.