By: Jeffrey M. Haber This blog will address many aspects of arbitration, including the pros and cons of this alternative dispute resolution mechanism. This installment will look at the difficulties the losing party has challenging the arbitral award. For related discussion, see Vacating an Arbitration Award is an Uphill Battle and Arbitration Award Partially Vacated Because Decision Was Found To Be “Irrational”. Arbitration is a voluntary form of dispute resolution. It is l

Wall Street trade groups are suing to block the DOL's new fiduciary rule for retirement advisors, arguing the agency overstepped its authority.

By Jeffrey M. Haber What are the consequences of submitting inaccurate trade data to the SEC and FINRA? Investment banks and securities firms are well aware of their responsibilities to adhere to the rules promulgated by the Securities Exchange Commission ("SEC") and the Financial Industry Regulatory Authority ("FINRA") regarding trade data, also referred to as "blue sheets." The federal securities laws and FINRA rules require firms to provide blue sheet information to FINRA

By Jeffrey M. Haber In today’s digital world, it is not uncommon for individuals and businesses to memorialize the terms of their oral agreements through email. But are such agreements enforceable? The answer depends on a couple of factors, including whether there is a writing that memorializes the material terms of the agreement. Oral agreements that cannot be performed within one year of the agreement must be in writing. This broad rule, contained in the statute of frauds,

By Jeffrey M. Haber On June 22, 2016, the Department of Justice (“DOJ”) filed a Notice of Supplemental Authority in U.S. ex rel. Westrick v. Second Chance Body Armor, et al., No. 04-0280 (D.D.C.), a case brought under the False Claims Act (“FCA”) against contractors who manufactured and sold bullet proof vests. The purpose of the filing was to notify the court of the U.S. Supreme Court’s unanimous decision in Universal Health Services, Inc. v. United States ex rel. Escobar,

Summary On June 16, 2016, the U.S. Supreme Court decided 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”). The “implied false certification” theory provides that a defendant may violate the FCA by failing to disclose noncompliance with a relevant statutory, regulatory, or contractual requirement. In Escobar, the Court unanimously confirmed that the th

By Jeffrey M. Haber Like most states in the country, New York is considered to be an “employment at will” state. This means that if there is no written agreement between the employer and employee (such as, a collective bargaining agreement) governing when the employer can fire the employee, the employer has the right to fire the employee at any time for any reason. When this happens, the employee has no legal recourse even when the termination is arbitrary, unfair or unreas

What are the requirements to obtain a monetary award under the SEC Whistleblower Program? In June, the Securities and Exchange Commission ("SEC") announced its second largest whistleblower award of more than $17 million to a former financial services employee (the largest award of $30 million was awarded in 2014). This bounty comes after the SEC issued two awards in May. The securities watchdog continues to see a significant uptick in whistleblower claims. "The information a

By: Jeffrey M. Haber Is it a breach of contract to bypass an agreed-upon, independent alternative dispute resolution (“ADR”) process and commence an arbitration proceeding elsewhere? When two companies enter into a contract, it’s common to include language wherein both parties consent to having any disputes related to the contract decided by an agreed-upon, neutral third party, rather than by a judge in a lengthy, formal court proceeding. The process of ADR-- which may be by

By: Jeffrey M. Haber How do anti-money laundering programs detect suspicious activity? The Financial Industry Regulatory Authority ("FINRA") announced in May that it fined two Raymond James entities for systemic flaws in their anti-money laundering programs. The units, Raymond James & Associates (RJA) and Raymond James Financial Service ("RJFS") were fined $8 million and $9 million, respectively. FINRA cited these units for not establishing and implementing adequate procedure

By: Jeffrey M. Haber Catastrophic events often bring out the best in people. Sometimes, however, such events bring out the worst in people. The events that followed Hurricane Katrina stand as reminders of the latter, at least according to Cori and Kerri Rigsby, two sisters who filed a False Claims Act ("FCA") complaint against State Farm Fire and Casualty Co. ("State Farm"), among others. The Rigsby sisters, two experienced claims adjusters, alleged that State Farm and other

By: Jeffrey M. Haber Damages Or Rescission . . . It Makes A Difference. Most people think that they are entitled only to monetary relief when they are the victim of fraud. That, however, is not always the case. Sometimes rescission – that is, returning to the status quo ante – is the appropriate form of relief. Indeed, there are times when a victim of fraud would rather be in the position he/she was in before the fraud occurred. When that happens, can the victim of fraud

Do mandatory arbitration clauses prevent class action lawsuits? The Consumer Financial Protection Bureau recently proposed a rule that would scale back mandatory arbitration clauses used by banks and other financial firms to limit their exposure to legal liabilities. While the new rule continues to allow arbitration in cases pursued by individual consumers, class actions would no longer be prevented. “Many banks and financial companies avoid accountability by putting arbitra

What does the Labor Department fiduciary standard mean for financial advisors? After telegraphing its punch for almost 6 years, the Department of Labor recently announced the highly anticipated fiduciary standard regulation that will require financial advisors who provide investment recommendations for retirement accounts, such as 401(k)s and IRAs, to meet a fiduciary standard. These advisors are now required to put their clients' interests before their own, rather than adhe