In a December 2016 regulatory notice to member firms, the Financial Industry Regulatory Authority (“FINRA”) announced that the Securities and Exchange Commission (“SEC”) approved amendments to Rule 12403 of the Code of Arbitration Procedure for Customer Disputes. The amended rule will increase (1) the number of arbitrators on the public arbitrator list that FINRA sends to parties during the panel selection process from 10 to 15, and (2) the number of strikes to the public ar

Over the year, this Blog has written about awards given to whistleblowers under the SEC and CFTC whistleblower programs – the anti-fraud/anti-corruption programs created under the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank Act”). See here , here , here , here , and here . As this Blog previously reported, on December 5, 2016, the SEC announced that it had awarded $3.5 million to a whistleblower who came forward with information that led t

Let’s say you, the reader, are an entrepreneur who wants to open a business. Although you are willing to run the risks associated with a startup, you do not want to incur any personal liability for the acts done by the business. After speaking with your family, friends and neighbors, you decide to incorporate the business. The consensus view is that a corporate entity, such as a corporation or limited liability corporation (“LLC”), will enable you to operate the business and

Previously, this Blog wrote about the importance of having a complete record when challenging an arbitration award. Recently, two claimants in arbitration learned the hard way that an incomplete record will not support vacatur of an award. See Abbott vs. RBC Dain Rauscher Inc. , No. 1-15-1612, 2016 IL App. (1st) 151612-U (Ill. App., 1Dist., 9/29/16). The Arbitration P roceeding: David James and Michael Abbott (“Plaintiffs”) filed a claim in arbitration against RBC Dain R

Jane is a shareholder in ABC Co. Over the past three years, the company has been losing money, due in large part to an increase in expenses. Jane learns the truth about the company’s financial condition and discovers that senior managers of the company are reporting their personal use of the company’s jet, cars and houses as a business expense. Because of managements’ failure to properly report the use of company property, the company’s expenses have skyrocketed. Jane wants t

In an article entitled “Why You Won’t Get Your Day in Court” appearing in The New York Review of Books, Judge Jed S. Rakoff of the United States District Court for the Southern District of New York, tried to explain why this is so. According to Judge Rakoff, there are several reasons for this occurrence. These include: the “cost of hiring a lawyer”; “the increased expense, apart from legal fees, that a litigant must pay to pursue a lawsuit to conclusion”; the “increased unw

The Securities and Exchange Commission (“SEC”) will tell anyone who listens that reporting violations of the securities laws is an important part of its anti-fraud/anti-corruption whistleblower program. This is especially so when the violations are difficult to detect. For this reason, among others, the SEC has encouraged company insiders with knowledge of wrongdoing to come forward with information about the violations. The carrot used to encourage such whistleblowing is

This blog previously wrote about Universal Health Services, Inc. v. United States ex rel. Escobar , a Medicaid case involving the “implied certification” theory of liability under the False Claims Act (“FCA”). In Escobar , the Court held that implied certification liability under the FCA may exist where the following two conditions are satisfied: (1) the defendant does not merely request payment, but also makes specific representations about the goods or services provided; a

Arbitration is an alternative form of dispute resolution, meaning it is an alternative to a court proceeding. In arbitration, the parties have their dispute resolved by neutral persons (known as arbitrators) knowledgeable in the areas in dispute, rather than by a judge or jury. Arbitration has been a form of dispute resolution within the securities industry for many years, primarily because it is generally considered to be faster, inexpensive and less complex than litigation

Consider the following story. John Smith has worked for Jane Doe for 15 years. Doe runs a small, but profitable, media consulting business. Smith has been one of Doe’s most productive account executives, generating significant business over the 15 years of his employment. Though compensated well, Smith decides that he wants to open his own media consulting firm. Smith secretly advises Doe’s clients that he intends to strike out on his own and requests that they follow him.

What is the amount of fines assessed by Finra this year? Thus far, 2016 has been a banner year for the Financial Industry Regulatory Authority ("FINRA"). Buoyed in part by a handful of large penalties, the self-regulatory watchdog is on pace for a record year as fines could be up by 70 percent when all is said and done. In the first six months of this year, FINRA assessed $79.4 million in fines against member broker-dealers. For the similar period in 2015 that figure was $37.

The Financial Industry Regulatory Authority ("FINRA") recently announced that the new Capital Acquisition Broker ("CAB") Rules will become effective April 14, 2017. While CABs still must be registered with the Securities and Exchange Commission, they will be subjected to a reduced series of FINRA rules and compliance obligations. Capital Acquisition Brokers at a Glance Capital Acquisition Brokers are those involved in private placements and mergers and acquisitions involving

New York, NY ( Law Firm Newswire ) November 22, 2016 - Freiberger Haber LLP is pleased to announce that Freiberger Haber LLP, the firm’s principal, has been quoted in a two-part series appearing in the ctnews.com blog, “Getting Personal About Business.” The article is about the importance of business owners retaining legal counsel before a dispute arises and the available methods of dispute resolution once dissension occurs. In part one, Freiberger Haber LLP discusses how s

What are the seal provisions in a complaint? The U.S. Supreme Court is weighing the conditions under which a federal court should dismiss lawsuits brought by whistleblowers who violate the law's non-disclosure requirements. In short, a complaint must be filed and remain under seal for sixty days. During this period, the government investigates the allegations and decides whether to intervene while the plaintiff is barred from publicly disclosing the suit. In November, the Cou

On November 4, 2016, a judge sitting in the United States District Court for the District of Columbia upheld the Department of Labor’s (“DOL”) fiduciary duty rules that were adopted to curtail conflicts of interest by financial advisors providing investment recommendations for retirement accounts. In a 92-page ruling, Judge Randolph Moss rejected arguments that the new rules would have “catastrophic consequences” for the fixed indexed annuities industry, that the DOL exceede

On November 14, 2016, the Securities and Exchange Commission (“SEC”) announced that it had awarded more than $20 million to a whistleblower “who promptly came forward with valuable information that enabled the to move quickly and initiate an enforcement action against wrongdoers before they could squander” their ill-gotten gains. The award “is the third-highest since the SEC’s whistleblower program issued its first award in 2012.” To date, the SEC has paid “more than $13

On October 25, 2016, the Appellate Division, First Department issued a unanimous decision addressing the protection of confidential information. In BitSight Technologies, Inc. v. SecurityScorecard, Inc. , 2016 NY Slip Op. 06980, the Court reversed the decision of the motion court, holding that “ hen a party sells information to with the requirement that the latter keep the information confidential, the information is still protected.” The Facts: The action arose from a Marc

On November 1, 2016, the U.S. Supreme Court heard oral argument on an appeal that State Farm Fire & Casualty Co. brought in a case filed by two whistleblowers back in 2006. (This Blog wrote about the case here .) The whistleblowers, Cori and Kerri Rigsby, brought a lawsuit against State Farm for defrauding the National Flood Insurance program on claims after Hurricane Katrina in 2005. The federal government declined to intervene. According to the Rigsby’s, State Farm charged