THE EXPERT'S EXAMINER
Jul-Sep 2019 - No. 2019-03
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homepage
.
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RECENT NEWS FROM THE ARBITRATION FRONT
(ed: This column follows recent items of interest to securities experts and relating to arbitration practice. These items are drawn from the past quarter's editions of the
Securities Arbitration Alert
, a publication of the
Securities Arbitration Commentator
and appear here with the permission of SAC's publisher.
This issue’s column is compiled by
The Expert Examiner
’s new Editor-in-Chief, George H. Friedman
)
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FINRA STATS, 8/19: CUSTOMER CLAIMS SURGE IN AUGUST, NEARLY DOUBLING FROM JULY TALLY.
We observed in our coverage of FINRA-ODR's monthly statistical report for July 2019 that, with 208 new customer claims filed that month, the monthly average for new submissions wasn't changing that much, but the mix was changing a lot. In August, the mix and the numbers reflect a big surge in customer claims.
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LOTS OF COMMENTS, MOSTLY SPLIT ALONG PARTY LINES, ON FINRA RULEMAKING PROPOSAL TO PROTECT AGAINST AT-RISK FIRMS AND UNPAID ARBITRATION AWARDS.
SOME SURPRISES, THOUGH
.
The comment period closed July 1
st
on FINRA’s Regulatory Notice seeking comments on rule changes aimed at better protecting investors from unpaid awards involving firms with significant regulatory histories. The thirty letters were mostly split along party lines, but some interesting alliances have emerged.
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THAT DIDN’T TAKE VERY LONG: FAIR ACT APPROVED BY THE HOUSE.
Just days after being cued up for a possible vote, the Forced Arbitration Injustice Repeal (FAIR) Act of 2019 was approved by the House of Representatives on September 20 by a mostly party-line vote.
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NEW TAXPAYER FIRST ACT APPARENTLY BARS MANDATORY ARBITRATION OF
ALL
(NOT JUST IRS) EMPLOYEE WHISTLEBLOWER DISPUTES
.
The new Taxpayer First Act signed into law on July 1
st
apparently bars any employer from requiring arbitration of tax-related whistleblower disputes. The new law also establishes an independent office for resolving taxpayer disputes.
READ MORE
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CERTIORARI
GRANTED IN ELEVENTH CIRCUIT CASE HOLDING THAT NON-SIGNATORY PARTY CAN’T COMPEL ARBITRATION UNDER THEY NY CONVENTION.
On the Term’s last day, SCOTUS granted Certiorari in an arbitration-centric case.
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DODD-FRANK BARS ARBITRATION OF SOX WHISTLEBLOWER CLAIMS, BUT WHAT ABOUT
DODD-FRANK
RETALIATION CLAIMS? SECOND CIRCUIT SAYS “NO,”
BUT A LEGISLATIVE FIX MAY BE COMING
.
Dodd-Frank bars expressly mandatory arbitration of Sarbanes-Oxley (“SOX”) whistleblower retaliation claims, but not such claims asserted under the Act itself the second Circuit holds. But a legislative fix may be coming.
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THAT DIDN’T TAKE VERY LONG! JUST AS REG BI WENT INTO EFFECT, SEVEN STATES AND DC SUED TO BLOCK IT
.
Just as the SEC’s Regulation Best Interest was about to go into effect September 10, several states and the District of Columbia sued to stop it.
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AWARD SURVEY: 2001-18 CLEARING BROKER-DEALER LIABILITY.
Broker-dealers who engage with customers as “introducing broker-dealers” don’t perform the “back office” tasks needed to clear and settle transactions. Rather, they depend on specialized clearing broker-dealers to perform those functions for the introducing BDs, relying on information provided by the latter.
READ MORE
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EXPERT OPINIONS: WHAT ARE THE COURTS THINKING?
(ed:
By reading how courts value, view and utilize testifying experts, one can better serve the fact-finder, more effectively help the client, and more likely avoid a bad experience
. For selected court decisions, we draw again from a SAC publication,
Securities Online Litigation Alert
(SOLA),
and other resources.)
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Expert testimony is not necessary to establish a claim of breach of fiduciary duty in the usual securities case.
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Prassas Capital, LLC v. Blue Sphere Corp., No. 3:17-cv-131 (W.D. N.C., 7/3/19).
Court should exclude testimony of expert witnesses who are going to testify on issues the court already resolved as a matter of law and any other evidence that fails to focus on the core issues of the case and is therefore more likely to confuse the jury, complicate the issues and unduly delay the trial than to offer probative evidence.
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SEC v. Lek Securities Corp., No. 1:17-cv-01789 (S.D. N.Y., 7/11/19). Distinguishing between fact evidence and opinion evidence is important; a witness cannot provide both, as opinions offered by a fact witness are not admissible. Still, a fact witness may offer a summary of her testimony by way of an affidavit.
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SER ACTIVITIES - WHAT'S CIRCLING AT THE ROUNDTABLE?
(ed: Meeting once a year to exchange views and learn more about professional interests lies at this organization’s roots. The Committees of SER work throughout the year to manage our finances, to increase our membership, to plan the organization’s future, and to prepare for the success and the funding of our next Conference. At least two members of the Board sit on each Committee, but non-Board members — past Board members and those who might one day want to join the Board — are a major strength of the SER Committee system. This column will familiarize members with the Board’s Committees and their ongoing activities.)
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The committees of The Securities Expert Roundtable are hard at work to constantly enhance the value of membership.
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HEARD THROUGH THE REGULATORY GRAPEVINE
(
ed: Keeping abreast of rulemaking and other regulatory initiatives can be a full-time job. Bringing it all together (or most of it, anyway) into a single column designed for quick scanning with drill-down linkage for further details — along with a bit of perspective and commentary -- has great value, in our view, for the busy expert. We invite SER members to point us to rulemaking, legislation, regulatory notices and policy speeches that are creating "buzz" in the securities community.
)
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MEMBER ACHIEVEMENTS - BRINGING CREDIT TO THE PROFESSION
(ed: In their daily lives and in their professional pursuits, SER members are engaged in a host of activities that reflect well on them and that all SER members should know about. Whether it’s writing an article, hosting an event, joining a professional committee, or just pursuing a smart practice, we report on those efforts here each quarter. Look to the “Newsroom” section of the SER Website for more frequent, timely reports on the activities of our members and let us know when you learn of an SER "member achievement" we should be recognizing.)
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SER MEMBER MOVES TO EDITORIAL HELM AT SECURITIES ARBITRATION COMMENTATOR
George H. Friedman
of George H. Friedman Consulting LLC has worn many hats in his extensive career in the field of dispute resolution. His firm's
Website
features him, first, as Dispute Resolution Expert, then as Arbitrator, Mediator, ADR Executive, Fordham Law Professor and Author.
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SER MEMBER LAUNCHES NEW COMPLIANCE SERVICE FOR INDEPENDENT BDs AND RIAs
Sander Ressler
and his new compliance outsourcing service, Essential Edge, were recently
featured
in Financial Advisor Magazine in a story titled, "For a Flat Fee, This Florida Firm will Inspect Broker-Dealer Branch Offices."
READ MORE
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SER MEMBER PRESENTS TO QWAFAFEW MEMBERS IN NYC
SER Associate Member
Gontran de Quillacq
recently presented at a seminar on September 24, 2019, a case analysis “Defense of a Loss on SVXY Options”, for QWAFAFEW Members in NYC.
READ MORE
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COMMENT LETTERS, SPEECHES & TESTIMONY
(ed:
In this column, we look back to the prior quarter with a view to spotlighting regulatory or litigation developments that influential leaders and major institutions in the securities world are talking, writing and worrying about. Selected writings or speeches that we find online and that deal with the primary issues of the day will be the focus of this column.
)
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FINRA offers helpful tips and tools for regulatory...
The Financial Industry Regulatory Authority, or FINRA, recently updated its website with a broad range of new investment resources, including a comprehensive menu of compliance tools. The goal is to help firms and advisors ensure they are meeting ...
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www.smartbrief.com
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Regulation BI, the Short Version
Last month the SEC approved a controversial set of rules and interpretations relating to financial advice. The four-part package includes Regulation Best Interest, which sets a new standard of conduct for brokers, as well as an interpretation of...
Read more
www.barrons.com
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STATISTICS, EVENTS & RESOURCES
(ed: This column seeks to apprise members of events, products and services that can be useful to them in their professional activities, including and especially the SER Website. Unless specifically stated, SER does not endorse or sponsor any of the products and services mentioned herein.)
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C&L New York Regional Seminar
The C&L Society New York Regional Seminar gathers compliance and legal professionals working in the financial services industry to exchange ideas, strategies and guidance on ways to gain a competitive advantage in the increasingly complex and...
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www.sifma.org
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2019 Senior Investor Protection Conference
The Senior Investor Protection Conference is a one-day event dedicated to sharing the most up-to-date regulatory information, effective strategies and solutions for protecting senior investors and vulnerable adults. This conference includes an...
Read more
www.finra.org
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2019 PIABA Annual Meeting and Securities Law Seminar
Barton Creek Resort 8212 Barton Club Drive Austin, TX 78735 PIABA will host the 28th PIABA Annual Meeting at the Barton Creek Resort in Austin, Texas.
Read more
piaba.org
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Expert Witnesses
The Expert Witnesses Committee focuses on providing continuing education to litigators regarding expert witnesses and promoting networking opportunities for litigators and expert witnesses in commonly encountered substantive areas, such as...
Read more
www.americanbar.org
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Quarterly Stats
Website:
Both July and August exceed 1,600 "
Unique Visitors", the highest on SER's record and passing last year's average by over 30%!
2018 Average - Unique Visitors 1,219
2018 Average - Total Visits 2,229
Jul - Unique Visitors 1,601; Total Visits 3,030
Aug - Unique Visitors 1,661; Total Visits 3,174
Sep - Unique Visitors 1,476; Total Visits 2,720
LinkedIn:
134 Followers (up 13% from 1st Qtr)
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IMPORTANT REMINDERS
With increasing website traffic, it is more important than ever to keep your SER profile up to date. Log in and update your photo, expertise, address, or number. New functions include uploading your resume and adding a LinkedIn link. Upcoming functions will include the option to link to a video. See our Newsroom item on one
member's video marketing
piece.
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Final Note
: The Contributors are members of the SER Public Relations Committee. They have designed this newsletter for the membership and worked to gather material for this issue. Members can help by sending Contributors information and suggestions for content in future issues. Members should also visit SER's "
Newsroom
" section of the Website periodically, as many of the items that appear here will be first posted in the Newsroom.
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Copyright 2019
Securities Experts Roundtable - publication appears on a quarterly basis and is available as a membership benefit to experts of the Securities Experts Roundtable. Comments - suggestions welcome. Email Newsroom@securitiesexperts.org with comments.
Mission Statement
: SER provides continuing professional education and promotes ethics and integrity among its members while remaining dispute neutral as an organization.
Disclaimer
: This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. The publisher is not engaged in rendering legal, accounting or other professional service or advice. If legal advice or other expert assistance is required, the services of a competent professional person should be sought.
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Securities Experts Roundtable | www.securitiesexpert.org
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