A Ninth Circuit panel has struck down JP Morgan Securities’ arbitration win in a wrongful termination case brought by one of its former financial analysts. The appeals court found that the Financial Industry Regulatory Authority (FINRA) panel acted unreasonably when it refused to delay the rest of the arbitration proceedings after the firm’s ex-financial analyst, Bradley Sayre, and his lawyer both had medical emergencies.
Sayre couldn’t make part of the proceedings because his wife had a baby. Not only that, but his attorney wasn’t able to be present for all of the hearing after suffering a stroke.
Sayre asked for a continuance, but the FINRA panel denied his request, deciding that it could make an impartial ruling even without his presence or that of his lawyer. The arbitration panel ruled in favor of the financial firm.
Ex-Analyst Said He Was Fired for Reporting Compliance Issues
Sayre contends that JP Morgan Securities and JP Morgan (JPM) fired him a few years ago for whistleblowing after he accused the brokerage firm of not following its own compliance policies. Sayre alleges that the financial firm told employees to leave certain parts of customer filings blank, as well as ordered them to discard internal documents that demonstrated that the bank had misled clients about the value of certain investments.
He contends this was going on while JP Morgan was negotiating with the US Securities and Exchange Commission (SEC) and the US Justice Department to settle claims that it had made misrepresentations about the quality of the mortgage-backed securities (MBS) it was selling leading up to the housing crisis. In 2013, the bank settled a slew of federal and state lawsuits alleging MBS fraud for $13B.
After the FINRA panel ruled in JP Morgan’s favor, Sayre sought to get that decision vacated. However, in early 2018, a US district court judge upheld the decision after finding that the arbitration panel had given reasonable grounds for continuance.
The judge also threw out Sayre’s complaint that JP Morgan had violated the Dodd-Frank Act and other securities laws by wrongfully terminating his employment. According to the lower court, the doctrine of res judicata prevents a relitigating of claims after there has already been an arbitration award.
Now, after reversing the arbitration ruling, the 9th circuit has thrown out the district court judge’s dismissal of that complaint as well.
Brokerage Firm Misconduct Lawyers
Shepherd Smith Edwards and Kantas, LLP (SSEK Law Firm) represents investors that were harmed due to the negligent or wrongful actions of broker-dealers. Not agreeing to delay arbitration proceeding so that a claimant can get a fair hearing is no reason to lose a case. This is why it is important that you have an experienced investor law firm representing you and fighting for your right to recovery.
For almost 30 years, SSEK Law Firm has represented clients before FINRA, in Federal and state courts, and in private arbitration. We have recovered many millions of dollars on investors’ behalf. An investor fraud claim is not the type of case you want to pursue without experienced legal help. Contact our brokerage firm misconduct attorneys today.