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FINRA Suspends Stockbrokers For Failing To Comply With Award Or Settlement May 2020

According to FINRA Disciplinary actions for May 2020, the following individuals were suspended from FINRA for failing to comply with a FINRA arbitration award or settlement agreement pursuant to FINRA rules:

  Thomas Bock   Mutual Securities, Inc.
  Securities America, Inc.
  Richard Brown   Arive Capital Markets
  Chelsea Financial Services
  Mary Evans   Mutual Securities, Inc.
  Securities America, Inc.
  Matthew Francis   Morgan Stanley Smith Barney
  Morgan Stanley & Co Incorporated
  James Heafner   Retirement Wealth Advisors, Inc.
  Taylor Capital Management Inc.
  Christopher Kennedy   Oppenheimer & Co, Inc.
  Liberty Tree Advisors, LLC
  Rachael Konz   Merrill Lynch, Pierce, Fenner & Smith Incorporated
  Morgan Stanley
  Jonathan Lake   Wells Fargo Clearing Services, LLC
  Morgan Stanley
  Douglas Leone   Salomon Whitney Financial
  Newport Coast Securities, Inc.
  Yousuf Saljooki   Worden Capital Management LLC
  Salomon Whitney Financial
  Ricardo Urrutia   Mutual of Omaha Investor Services, Inc.
  AXA Advisors, LLC
  Frank Wroblewski   National Securities Corporation
  Wells Fargo Clearing Services, LLC

Brokers and brokerage firms are obligated to satisfy all FINRA arbitration judgements, without any unreasonable or unwarranted delay. FINRA Rule 9554 allows FINRA to ensure that brokers and brokerage firms comply with the terms of securities arbitration awards.

What is FINRA Rule 9554?

Under FINRA’s securities industry regulations, arbitration awards must be paid within 30 days of the date that the award was granted. If a broker or brokerage firm fails to comply with this requirement, then industry regulators can use FINRA Rule 9554 to take immediate enforcement action against them.

FINRA Rule 9554 allows for expedited suspension or cancellation of membership of any party that fails to comply with a FINRA arbitration award. Specifically, regulators are empowered to send the violating party a 21-day written notice that their securities industry membership will be revoked if they do not rectify the problem.

What Defenses Do Brokers Have Against a FINRA Rule 9554 Action?

Brokerage firms and stockbroker primarily have four defenses to avoid expedited suspension under FINRA Rule 9554:

  • They can prove that the arbitration award has actually already been paid in full;
  • They can prove that they have reached a voluntary settlement on payment terms with the complaining customer;
  • They can prove that they have taken further legal action, filing a claim to vacate or modify the award and that their motion to do so is still pending in the court; or
  • They can prove that they have filed for bankruptcy or that this debt has already been discharged in bankruptcy.

However, a financial advisor or brokerage firm cannot argue that they currently lack the “bona fide ability to pay”.

Rule 9554 is an important investor tool that helps maintain confidence in the securities arbitration process that claims will be satisfied. Unfortunately, many brokerage firms lack adequate insurance or are otherwise poorly capitalized and FINRA arbitration frequently exposes firms and individual financial advisors who fail to satisfy their financial obligations.

Silver Law Group represents investors in securities and investment fraud cases through FINRA arbitration or court. Our lawyers are admitted to practice in New York and Florida and represent investors nationwide in securities arbitration to help recover investment losses due to stockbroker misconduct. If you have any questions about how your account has been handled, call to speak with an experienced securities attorney. Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.

Our lawyers have extensive experience collecting FINRA arbitration awards, prevailing on Motions to Vacate FINRA arbitration awards and using various collection efforts to enforce FINRA awards after they are received.

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