Within the last week I have inherited a promissory note case representing the rep as respondent and served on another prom note case as an arbitrator.  I want to share what I believe are lessons learned and things to definitely consider before proceeding in these types of cases.  This post will cover the case I inherited and the next will cover the case I served as an arbitrator on.

1. Previous attorney specialized in employment law but had no experience in FINRA arbitrations.  The attorney's website had one mention of "arbitration" but a simple search on the FINRA-Dispute Resolution website would show that the attorney has not been on any awards.  Ask more about their experience.

2. Previous attorney treated the whole arbitration process as a court case.  Referring to the forum as the "honorable court" and making motions that are rarely used in FINRA arbitration.  The answer to the statement of claim was DEVOID of any story or background information of the broker.  The answer had one word responses to the allegations (i.e., "denied" "admitted" etc.).  The panel wants to see a story or some sort of background, not sterile plain vanilla answers.  So the only side telling the story was the BD.  Tell your story!

3. Previous attorney had a name of a client from a different case in the answer.  Obvious that the answer was a template and one used from a prior COURT case.  Such an error can discredit the broker's case.  Proofread your filings prior.

4. Previous attorney referred to the broker's account that was frozen as collateral to secured the note as a "bank" account, several times.  Previous attorney obviously had no experience in the securities industry.  The BD in their answer to the broker's counterclaim was all over the fact that no BANK accounts were frozen -- embarassing for the broker.

5. Previous attorney advised broker of counterclaim for age discrimination -- good and three claims over the frozen account.  What about drop in commissions? What about losing a major portion of the book of business?  Etc.  Previous attorney ignored that unique part of this industry. 

6. The age discrim claim was denied by a state agent, but the broker had a right to an appeal by hearing and would have opted for it.  Previous attorney gave no such advice.

7. Previous attorney agreed to keeping an all industry panel even after alleging a tort in the counter-claim.  Also previous attorney did not strike one panelist who was a general counsel for a large BD -- are you kidding???  That panelist ended up on the panel.

There were other minor issues but I think you get the point.  If you're defending against a BD's demand for repayment or a filed statement of claim and are considering an attorney be sure to pick a competent one, preferrably one that knows what a stock is or one that has a clue about our industry.

Fortunately, I was able to resolve the matter amicably for both parties without the risk of having to defend what I believe was a poorly managed and plead case from the start.