Outisde the FINRA building in New York. (Photo: Shutterstock)
B. Riley Financial subsidiary Wunderlich Securities on Tuesday filed a petition to vacate the $11.4 million award that a three-person Financial Industry Regulatory Authority Office of Dispute Resolution panel recently ordered the firm to pay to New York-based investment firm Dominick & Dickerman and one of its executives, who were the claimants in the arbitration.
In Wunderlich's petition, filed in U.S. District Court for the Southern District of New York, Wunderlich slammed the panel, claiming it was "inattentive" during the last hearing in the arbitration, March 12, which was held virtually by agreement of each side due to concerns over COVID-19. It was the first FINRA arbitration award involving a Zoom virtual hearing, the regulator said.
During the Zoom hearing, arbitrator Joel Finard looked at other screens, "typing, and eating during the course of the presentation," Wunderlich claimed in the petition. Arbitrator Jill Gross, meanwhile, "blocked her screen during the hearing, preventing the parties from confirming that she was even participating," Wunderlich alleged. Also, "at one point during closing arguments" for Wunderlich and Gary Wunderlich, the founder and former CEO of Wunderlich Securities and parent firm Wunderlich Investment Co., Chairperson A. Rene Hollyer "walked away from his screen," the petition claimed, adding the presentation resumed only once Hollyer returned to his screen.
Wunderlich also criticized the panel over its conduct in the earlier hearings, which were all held at the offices of Dominick & Dickerman's counsel in New York City. Among other things, "when the Panel was not interrupting testimony, they would appear to be inattentive and failed to follow the proceedings," Wunderlich claimed, also alleging the panel was biased against it.
The award should be vacated because the panel "so imperfectly executed its mandate that it crafted an indefinite award that fails even to identify the grounds on which the Claimants won or the claims for which" Wunderlich was "supposedly liable"; it "failed to afford Petitioners a full and fair opportunity to present their case"; and "exceeded its authority and manifestly disregarded applicable Delaware law," Wunderlich said.
