Professional Documents
Culture Documents
Matt Lichtenberg
David Living Trust
Will Ferreii
Viveca Paulin
Counter-Claimant
Counter-Respondents
Matt Lichtenberg
David Living Trust
Will Ferreii
Viveca Paulin
REPRESENTATION OF PARTIES
CASE INFORMATION
Trustee Larry David signed the Submission Agreement on behalf of Claimant David
Trust: January 22, 2009
Answer to Counterclaim filed by Ferreii and the David Trust on or about: January 29,
2009.
CASE SUMMARY
In the Statement of Claim dated August 11, 2008, Claimant Lichtenberg asserted that
Respondent engaged in the unauthorized and unsuitable purchases of unspecified
preferred securities in the accounts of two unnamed real parties in interest.
Unless specifically admitted in its Answer, Motion to Dismiss, and Counterclaim, dated
January 5. 2009, Respondent denied the allegations made in the Statement of Claim
and asserted various afflrmative defenses.
In their Answer to the Counterclaim dated January 29,2009, Claimants Ferreii and the
David Trust denied the allegations made in the Counterclaim.
In the First Amended Statement of Claim dated January 23, 2009 Will Ferreii, Viveca
Paulin, and the David Living Trust were added as Claimants. Claimants asserted that
Respondent engaged in unauthorized and unsuitable purchases of unspecified
preferred securities with regard to their respective accounts.
In its Amended Counterclaim dated February 17, 2009, Respondent asserted a claim
for indemnification against all Claimants.
In the Second Amended Statement of Claim dated June 9,2009, Claimants asserted
that Respondent made unauthorized purchases of unspecified preferred securities with
regard to their respective accounts.
RELIEF REQUESTED
At the close of the hearing. Claimants requested rescission of the transactions in both
the David Trust Account and the Ferrell/Paulin Account totaling $18,200,000.00 of
preferred securities. Claimants in turn would pay Respondent $2,700,000.00.
At the close of the hearing, Respondent made an additional request for attorneys' fees
of $650,000.00, discovery sanctions, costs, and a dismissal of all claims with prejudice.
The Arisitrators acknowledge that they have each read the pleadings and other
materials filed by the parties.
Claimants Ferreii. Paulin, and the David Trust did not appear in person at the
evidentiary hearing, but appeared through their agent. Claimant Lichtenberg.
The parties have agreed that the Award in this matter may be executed in counterpart
copies or that a handwritten, signed Award may be entered.
FINRA Dispute Resolution
Arbitration No. 08-02874
Award Page 5 of 8
AWARD
After considering the pleadings, the testimony and evidence presented at the hearing,
the Panel has decided in full and final resolution of the issues submitted for
detemnination as follows:
1. Claimants' claims are denied in their entirety and dismissed with prejudice.
2. Regarding Respondent's Counterclaim, Claimants are jointly and severally liable for
and shall pay Respondent $600,000.00 in costs and attorneys' fees pursuant to the
following:
a. Trading Authorizations executed by Ferreii and Paulin, and Power of Attorney
executed on behalf of the David Trust;
b. Cal. Civil Code § 2772;
c. Roozv. Kimmel (App. 1 Dist. 1997) 64 Cai.Rptr.2d 177, 55 Cal.App.4th 573;
d. Todd Shipvards Coro. v. Cunard Line Ltd.. 943 F.2d 1056 (9th Cir. 1990);
e. Mastrobuono v. Shearson Lehman Hutton. Inc.. 514 U.S. 52, 61 (1995);
f. Advanced Micro Devices v. Intel Coro.. 9 Cal. 4th 362. 384 (1994);
g. FINRA Code of Arbitration Procedure Rule 10330(e);
h. Johnson, et al. v. CISC Oppenheimer Corp. et al.. Pacific Stock Exchange
Case No. 98-S017;
i. Vildosola. et al v. UBS Financial Services Inc.. Citigroup Global Martlets Inc.
and Juan Ignacio Cabanas Vildosola. FiNRA Case No. 06-05306 (July 30,
2008);
j. Marshall & Co.. Inc. v. Duke. 114 F.3d 188 (11th Cir. 1997); and
k. Weber V. UBS Financial Sen^ices. Inc.. et al.. NASD Case No. 03-05403
(2005).
3. Claimants are jointly and severally liable for and shall pay Respondent $22,500.00
for discovery abuse and failure to comply with the forum's discovery rules and
procedures. After three motions to compel discovery by Respondent and three
orders from the Panel, Claimants were still supplying ordered documents on the
afternoon of the second day of the evidentiary hearing.
FEES
Filing Fees
FINIRA Dispute Resolution assessed a filing fee* for each claim:
Initial Claim filing fee =$ 1,800.00
Counterclaim filing fee =$ 3.700.00
Member Fees
Member fees are assessed to each member finm that is a party in these proceedings or
to the member finn(s) that employed the associated person(s) at the time of the events
giving rise to the dispute. Accordingly, as a party J.P. Morgan Securities LLC, f/k/a J.P.
Morgan Securities. Inc.. f/k/a Bear. Stearns & Co. Inc.. is assessed the following:
Member surcharge = $ 3,750.00
Pre-hearing process fee = $ 750.00
Hearing process fee = $ 5,500.00
Adiournment Fees
Adjournments granted during these proceedings for which fees were assessed:
The Panel has assessed $200.00 of the discoveryrrelated motion fees jointly and
severally to Claimants.
The Panel has assessed $600.00 of the contested motion for issuance of subpoenas
fees jointly and severally to Claimants.
FiNRA Dispute Resoiution
Ari}itratlon No. 08-02874
Award Paoe 7 of 8
The Panel has waived $2,400.00 of the hearing session fees for the May 1. 2009 and
July 10,2009 pre-hearing conferences.
All balances are payable to FINRA Dispute Resoiution and are due upon receipt.
FINRA Dispute Resolution
Arbitration No. 08-02874
AwanJPaqff8tf<f
ARBITRATIOM PANEL
Date of Senrice
//1 1^1'
( Dispute Resolution use only)
eTPbrFiNRAI
FINRA Dl8pul9 nMohjHon
AfbHrsUon No. 06412874
/SIgnetGre'Dats
ARpiTflATlOW PANEL
David L. Maisien Public Art)ltraton Presiding Chairperson
Elizat)eth A. Copley Public Ari}itratpr
Linda L. Blackweli Non-Public Art)itrator
LI
Dispute
Date of Service (For FINRA DisputeRe
Resolution use only)