H&R Block Wins Promissory Note Arbitration
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In the Matter of the Arbitration Between H&R Block Financial Advisors, Inc., Claimant, vs. Brian Taylor Ainge, Respondent, and Charles A. Chambers (Third Party Respondent) and Andrew M. Kistler III (Third Party Respondent) (FINRA #08-02776, March 19, 2010), Claimant H&R Block (HRB) asserted breach of promissory note and unjust enrichment, arising from Respondent Ainge’s alleged failure to repay sums due pursuant to a fully executed promissory note dated November 16, 2007, ("The Note"). HRB requested:
compensatory damage for the outstanding principle, in the amount of $330,227.88; accrued note interest, at the rate of 4.39%, from November 16, 2007 through June 30, 2008; post-default interest, at the rate of 7%, from June 30, 2008; and, all appropriate costs and expenses, including the filing fees of $2,125.00.
Respondent Ainge (Ainge) denied the allegations and asserted the following causes of action relating to his employment/termination from HRB :
fraudulent inducement; deceit; common law fraud; constructive fraud; tortious interference with business activities; negligent misrepresentation; negligence; and, failure to supervise.
In his Counterclaim and Third Party Claim, Ainge requested:
dismissal of Claimant's Statement of Claim with prejudice; costs, including attorney's fees expended in defending this action; a judgment in favor of Respondent and against Claimant and Third Party Respondents, jointly and severally; compensatory damages in an amount to be determined at the arbitration hearing, but not less than $550,000.00; punitive damages, in an equal amount of at least $550,000.00; costs; prejudgment interest; and, attorney's fees.
The FINRA Panel denied Respondent Ainge's Counterclaim/Third-Party Claim and found him liable to Claimant HRB for compensatory damages in the amount of $354,443.16, inclusive of accrued note interest at the rate of 4.39% per annum, from November 16, 2007 through March 2, 2010. In keeping with the protocol in these FINRA arbitration cases, the Panel offered no explanation of its findings or decision.
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Not sure if you know, but follow up question:
So, the defendant loses and has to pay $350K back to H&R.......
What if he doesn't have it and fails to male payment right away?...........Does Finra take away his license after 90 days?
I'm sure many advisors who lose these cases don't have that kind of money sitting in the bank.......whether there initial money was spent, lost on the market, or whatever.......