Appeal of Finra Arbitration Case Before the Fifth Circuit

A case against Raymond James Financial Services (RJFS) alleging fraud and perjury in an arbitration case is on appeal to the Fifth Circuit for the United States Court of Appeals, according to a PR Web release. The case involves the possibility of RJFS and its branch manager obtaining a favorable arbitration award by fraud, including perjury, fraud upon the court, obstruction of justice, spoliation of evidence, collusion and conspiracy, according to the article.

The case all began when Chris Wanken, a former financial adviser for Raymond James, filed a FINRA arbitration claim against his former employer in December 2008 alleging wrongful termination, breach of contract, breach of partnership, failure to supervise and defamation of his U-5, among other things. After the conclusion of the four day evidentiary hearing in December 2009, the FINRA arbitration panel denied the former adviser’s claims other than Raymond James being ordered to pay him $1,200 in costs. The panel assessed the Claimant with $5,100 in forum fees and Raymond James with $15,300.

Mr. Wanken has alleged in federal court that the defendants perjured themselves during the arbitration hearing, offered testimony they knew to be false, suppressed thousands of pages of discoverable documents and that this was a plan set in motion by and participated in by the defendants and their attorneys, according to his brief. Defendants were to file briefs by June 7, 2011.

Not mentioned in the press release is the fact that one of the Respondents in the original arbitration claim was Mr. Wanken’s father, John Dwight Wanken, who was the Claimant’s partner in Beacon Financial Advisors which was affiliated with Raymond James. Furthermore, Claimant Wanken has represented himself throughout the entire arbitration process and in pleadings filed with the Fifth Circuit. Voluminous pleadings detail volatile family issues, disagreements and struggles. It will be interesting to see what the Fifth Circuit’s take is on all of this.


UPDATE:

Ultimately, the Fifth Circuit Court of Appeals found against Christopher Wanken and denied his petition to overturn the arbitration award.  According to the court, Mr. Wanken failed to provide any evidence in the record presented to either the district court or the court of appeals, beyond conclusory statements and claims that it was true, that there had been fraud sufficient to avoid an arbitration award.  The standards to overturn an arbitration award are very limited and difficult to meet.  Mr. Wanken attempted to claim two of them: that the Panel refused to consider evidence, and that the award was procured by fraud.

The Fifth Circuit determined that the approximately 6000 pages of documents that the Panel ordered the other parties to produce was sufficient under the circumstances, and did not meet the standard of failure to consider evidence simply because Mr. Wanken was not given everything that he asked for.  Similarly, the court held that even assuming there were some inconsistencies in the testimony given before the arbitration panel and the Texas Workforce Commission, it was on an issue that was not critical to the determination of the arbitration, and therefore not grounds to overturn the award.

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