Investment News ran a story today about an investor ordered to pay the legal bills for a broker-dealer and its representative for bringing a frivolous arbitration claim. the FINRA arbitration panel found that the investor was experienced and sophisticated and made investment decisions independently. The investor was ordered to $75,000 of the firm's $110,000 legal costs, and $6,000 of the $7,200 hearing costs.
To say that this is an unusual outcome would be an understatement, especially since FINRA adopted a policy which allowed for all non-industry arbitrators hearing client disputes. This is a welcome development, even if it is only one in a row. Now, to set about collecting the award.
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