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Three FINRA Arbitration Awards Analyzed by Bill Singer

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Aug 5, 2010 10:56 am

Three FINRA Arbitrations -- three interesting outcomes.  Read Bill Singer's analyses at

In a Statement of Claim filed July 2009, Claimant Kajeet, Inc. sought $110,000,000 (One-Hundred and Ten Million Dollars) in consequential damages arising from its inability to access its funds in an investment in student loan Auction Rate Securities ("ARS"). Respondent UBS generally denied the allegations and asserted various affirmative defenses. In the Matter of the Arbitration Between Kajeet, Inc., Claimant, versus UBS Financial Services, Inc., Respondent. (FINRA Arbitration #09-03990, August 3, 2010).

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In a Statement of Claim initially filed in January 2009, Claimant Rohan Russell, who proceeded pro se, claimed to have sustained damages as a result of his inability to liquidate his position in Calypso Wireless, Inc. Claimant sought $31,500 in compensatory damages, $63,000 in lost opportunity damages, and $3,600 in interest. Claimant also sought $100,000 in punitive damages. In the Matter of the Arbitration Between Rohan Russell, Claimant vs. Northgate Securities, Inc., Respondent (FINRA Arbitration # 09-00329, July 30, 2010).

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In a Statement of Claim filed in June 2009, Claimant Marcia Baker alleged various causes of action including fraud and negligence related to the "purchase of unspecified stocks and options."  Claimants requested $658,255.87 in compensatory damages plus fees, costs, punitive/exemplary damages. Respondents generally denied the allegations and asserted various affirmative defenses. In the Matter of the Arbitration Between Marcia Baker,Claimant vs. Global Trading Group,Inc. and William Savary, Respondents (FINRA Arbitration # 09-04019, July 30,2010)
Aug 6, 2010 1:35 pm


Gracias on your analyses...

2 things (from the 2nd case):

 What is the burden of proof regarding a claim for "lost Opp. cost"...?( In this case  $63,000 ) That one seems to be a hard one to prove. Unless of course it was foreseeable by both parties, in which case I would suppose a contract must exist.

Secondly, I couldn't agree w/ you more on the concept of what egrgious is... Webster's says: extraordinary in some bad way...seems very subjective. However, with regards to punitive damages, I know that some states deal w/ claims for punitive damages differently. For instance, some states only allow 25% of the punitives awarded to go to the plaintiff, the remainder is credited to a state fund.

In a FINRA arbitration can the claimant expect to keep his award of punitive damages or does it differ from jurisdiction to jurisdiction...?

Thanks in advance if you get around to this...

Aug 9, 2010 1:03 pm


Thanks for taking the time to explain this... It's funny you mention the "Madoff Funds" as a lost investment... that was my same example I gave to an associate. I remember in 1L, the hypos wherein a guy, P, started a new business and with in 3-4 mths was damaged by D and had to prove lost profits... in law school land this is almost always impossible for the new business owner to do. Lost oppurtnity costs seems like it would be exponetially more it appears is the case.

Thanks again.