Florida Arbitration Panel Awards Investor $210,000
On October 3rd, 2018, a FINRA Arbitration Panel in Tampa, Florida awarded $210,000 in financial compensation to an investor who filed a negligence claim. The securities fraud case was filed against Caldwell International Securities (CRD#: 104323) and two of its former brokers: Sean Francis Lanci (CRD#: 4180997) and Dominic Paul Rota (CRD#: 4886731).
Notably, in January of 2017, Caldwell International Securities was expelled from the industry for a serious violation. FINRA took this action after the brokerage firm failed to pay a $1 million fine that was levied following the agency’s findings that the Caldwell International brokers engaged in a pattern of unsuitable investment recommendations. In addition, neither Mr. Lanci nor Mr. Rota currently maintains active registrations in the securities industry.
The FINRA Arbitration Hearing: Default Judgement
According to public records from the Financial Industry Regulatory Authority (FINRA), the claimant (the investor) alleges losses in three different stocks: U.S. Coal and Delta Directional Drilling, Groupon, and Facebook. In making his claim, this investor raised several different causes of action against the brokers and brokerage firm, including:
- Breach of contract;
- Broker negligence;
- Violation of the Florida Securities and Investor Protection Act;
- Violation of the Florida Deceptive and Unfair Trade Practices; and
- Breach of fiduciary duty.
None of the respondents named appeared before the arbitration panel. Further, the panel determined that the claimant made a good faith effort and did the proper due diligence to get a response from the defendants. As a result, the panel concluded that the investor was entitled to a default judgement. The investor was awarded $210,000 in financial compensation. With FINRA arbitration proceedings, the parties retain some level of privacy. While the cause of action and the award are generally made public, some of the specific details of the case are kept between the parties.
Brokerage Firms Have 30 Days to Comply With an Arbitration Award
Under FINRA Rule 9554, registered brokers and FINRA member firms must pay an arbitration award or file a valid legal appeal within 30 days of the decision. If they fail to do so, they are in direct violation of securities industry rules. FINRA has the authority to suspend brokers and broker-dealers that violate this regulation on an expedited basis. If a violation of Rule 9554 has occurred, FINRA will send the violator a 21-day termination notice. If the arbitration award is not paid in full within 21 days, the broker or brokerage firm will be expelled from the industry. Following a suspension, investors can take additional legal action to enforce the award against the responsible broker or broker-dealer.
Get Help From Our Miami Securities Fraud Lawyer
At Carlson & Associates, P.A., we are proud to represent investors throughout South Florida. If you or your family member has suffered losses because your broker made material misrepresentations or material omissions, our legal team is here to assist you. Please do not hesitate to call us at our Miami law office to schedule a fully private initial consultation.