I really, really, really wish that I could tell you more about this Financial Industry Regulatory Authority (“FINRA”) Arbitration; unfortunately, as I so often lament, the Decision is bare bones and provides no meaningful facts or rationale.
What I can tell you is that the Claimants, apparently former registered persons of Citigroup Global Markets, Inc./Smith Barney, filed a FINRA Arbitration Statement of Claim in May 2009, thereafter amended three times through February 2011. Among the various causes of actions were breach of contract, unjust enrichment, and tortious interference.
Essentially, Claimants sought $78,047,187.00 in compensatory damages; punitive damages of two times the compensatory damages ($156,094,370.00) and interest; additional damages; and attorneys’ fees.
Yup, that's not a typo. They asked for some $78 Million in comps and an additional $156 Million for good measure. Sort of breathtaking. Too bad we don't know what prompted the lawsuit or what any of the facts were.
In the Matter of the FINRA Arbitration Between James Bryan Minchello, Robert Vincent Minchello and Martha Jane Sullivan, Claimants, vs. Citigroup Global Markets, Inc.and Citigroup, Inc., Respondents (FINRA Arbitration 09-02800, January 20, 2012).
SIDE BAR: James Minchello was listed in Boston Magazine’s “The 20 Best Financial Advisors” in March 2006. The article stated:
9. James Minchello
Citigroup Smith Barney, Boston, 617-589-3500, www.smithbarney.com
Typical account size: $5–20 million; typical net worth of clients: $10 million; total team assets: $4.8 billion; percentage of accounts worth under $1 million: n/a
Barron's named Minchello one of America's top 100 financial brokers last year.
Respondents generally denied the allegations and asserted various affirmative defenses.
Decision
The FINRA Arbitration Panel found Respondents jointly and severally liable and ordered them to pay to Claimants:
- $15,800,000.00 in compensatory damages plus 6% interest from December 15, 2004 to January 13, 2012; and
- $1,000,000 in sanctions
Bill Singer's Comment
Okay, look, I'm really fed up with this kind of FINRA Arbitration Decision. In my opinion, it is absurd to render an award for $15.8 Million in employment-related compensatory damages with a further $1 Million in "sanctions" tacked on an not offer the industry or the investing public a scintilla of factual background. To add insult to injury, the Decision doesn't proffer any rationale for this humongous award. Given that there were 84 hearing sessions, it would certainly have been informative to learn what went on at some of them.
Frankly, this makes a farce out of mandatory industry arbitration. Why bother publishing anything about the dispute?
