FINRA Panels Fails To Take Control Of Attorney

A Financial Industry Regulatory Authority (FINRA) arbitration panel in Los Angeles, California was pushed to the limit by the Claimant’s attorney. Read further. In a claim that was filed in December 2009, the Claimant Paul Oshideri was seeking compensatory damages from Fidelity Brokerage Services LLC, National Financial Services LLC, Frank Sanchez and Lawrence Goodkind. The Claimant alleged various causes of action, including negligence, breach of fiduciary duty, failure to supervise, unsuitability, breach of contract and fraud, among other things. The causes of action all apparently related to the sale of Bankrate (RATE) stock on margin in the Claimant’s account. The amount of damages sought is unknown.

At a pre-hearing conference on June 1, 2010, Claimant’s counsel, Raj D. Roy, asked the panel to hold off taking any action in the case until he decided whether he was going to accept the panel as it was constituted. This is a request of every panel at the initial pre-hearing conference, which is a telephonic conference between counsel for each side and all three of the arbitrators, requiring each side to confirm acceptance of the panel. Apparently, Mr. Roy never decided if the panel was acceptable. On June 29, 2010, the arbitration panel issued an order requesting that he advise FINRA in writing of the acceptance of the panel as constituted by July 8, 2010 and to simultaneously advise FINRA of several available dates for the pre-hearing conference to be rescheduled. Apparently, Mr. Roy again did nothing which was in violation of the arbitration panel’s order to advise of acceptance of the panel and to provide dates for the pre-hearing conference.

The panel reset the pre-hearing conference for September 17, 2010. Guess what? Mr. Roy again failed to enter an appearance during that pre-hearing. Therefore, on September 17, 2010 the panel entered another order setting the pre-hearing conference for September 28, 2010 and ordering Mr. Roy to appear or face certain sanctions at the discretion of the panel for ignoring and violating rulings of the panel. Guess what? Mr. Roy again failed to appear saying that he was unavailable but said he could be available on October 22, 2010 at 10:00 AM, so the pre-hearing was set for that time. Guess what? On October 21, 2010, Mr. Roy or someone from his office called and said he could not be available at 10:00 AM and that 11:30 AM on that day, October 22, 2010, would be better. Can you believe a panel would put up with this over and over again? Well, guess what? The 11:30 AM pre-hearing conference came and everyone was present and accounted for except, guess who? Yep, Mr. Roy was “in court” and nobody seemed to know when he would return. After going into executive session to decide what to do going forward, the panel issued an order again demanding three available dates for pre-hearing conference between October 22, 2010 and November 9, 2010, fined him $500 for violating the various other orders and threatened dismissal of the case.

Finally, on November 4, 2010, six months after the first pre-hearing conference was scheduled, discovery cutoff dates and evidentiary hearing dates were set. Apparently, Mr. Roy failed to produce any documents that are required by FINRA Rules and the Respondents filed a Motion to Compel Production of Documents on April 15, 2011, which the Chairperson granted on May 5, 2011. Guess what? Nothing was ever produced in violation of another order of this panel and Respondents on June 2, 2011 filed a Motion for Sanctions to Preclude the Claimant from being able to produce any oral or documentary evidence during the hearing because of Mr. Roy’s continued disregard for the ruling and Order of the Panel on May 5, 2011. Then, on June 13, 2011, the day before the evidentiary hearing was to start, the Claimant’s attorney, Raj D. Roy, presented the panel with nothing less than a Motion to Withdraw and Substitution of Counsel requiring the Claimant to proceed without counsel and represent himself. On the day of the hearing, Respondents again raised their Motion for Sanctions however, the panel felt it would be unfair to the Claimant since all of the issues were caused by his attorney. The case went forward and the Claimant failed to prove his case and the FINRA arbitration panel denied his case in its entirety. No sanctions were assessed against the Claimant individually but the panel found lawyer Roy liable and ordered him to pay $500 in monetary sanctions to Fidelity Brokerage Services LLC. (FINRA# 09-07185; Paul Oshideri v. Fidelity Brokerage Services LLC, National Financial Services LLC, Frank Sanchez and Lawrence Goodkind).

Certainly, there are legitimate reasons that may cause a case or cases to be delayed. Unfortunately, the panel in this case let the Claimant’s attorney, Raj D. Roy, get away with murder when they could have and should have taken control of the situation and sanctioned him much sooner. Apparently, this is not a first for Mr. Roy, since the Court of Appeal of California, Second Appellate District, Division Eight, commented on Mr. Roy’s actions in another case by stating, “The record shows that between January and March 2006, Roy was the subject of several discovery motions by Respondents. On January 17, 2006, the court ordered Roy to exchange his expert witness list, to produce Krishnan for an independent medical examination (IME) within 10 days and to supply more than just his previously produced W-2 form in order to prove his loss of earnings claim.” “Respondent’s counsel submitted a declaration stating that Roy said he had refused to turn over his expert witness list because he did not want to “show his hand.” The court in that case sanctioned Roy and threatened other sanctions, including striking the complaint. (Kris Krishnan v. Cedars-Sinai Medical center, et al; Court of Appeal, Second Appellate District, California).

Contact Us
Contact Us: (800) 259-9010