Centaurus Financial Blistered in Award
A Portland, Oregon FINRA arbitration panel blistered Centaurus Financial in an award where the panel felt compelled to elaborate on the rationale for their decision. Usually panels offer no explanation as the how or why they arrived at their decision, when entering an award. In this case, the panel went to great lengths to elaborate and explain their decision, even though the parties had not jointly requested an “explained decision” as is provided for by FINRA Rule 13514(d).
The Claimants in the case, Ivan and Hazel Sleight had requested compensatory damages of $435,000. Naturally, the Respondent denied any wrongdoing and the broker involved, Francis Bart Bartholic, Jr., was not a named party to the arbitration. The ultimate outcome of the five day hearing in December was an award of $163,549 in compensatory damages to the Claimants, in addition to $49,936 for attorneys’ fees and expert witness costs. Forum fees of the arbitration were split equally between the parties at $7,650 each.
Prior to the explanation of their decision, the panel states that, “This was a highly contentious case” and they go on to point out that the Claimants submitted six four inch notebooks totaling up to 15,000 pages with no index for each separate document. Clearly irritated by this, the panel remarked in a foot note that “this inundation of paperwork on the panel was excessive and together with the lack of separate numbering of each document, made unnecessarily difficult the conduct of the hearings and deliberations of this case.” Notwithstanding their apparent irritation with Claimant’s document presentation, the panel still awarded damages to the Claimants.
When Centaurus hired Bertholic, they knew he had filed bankruptcy in 1991 and he had two unsatisfied IRS judgment liens. While employed in 2002-3 he had credit card debts more than he could handle; from June 2004-5 he sold “securities” in his corporation, First Liberty Financial, to customers of Centaurus in violation of securities laws and in 2005 he borrowed money from Centaurus customers to invest in real property, which he had reported as an outside business activity. The panel criticized Centaurus for not following up with their customers after learning of his unlawful activity and terminating him in February 2006. Bertholic filed another bankruptcy in 2009. (FINRA# 10-00536; Ivan Sleight and Hazel M. Sleight v. Centaurus Financial, Inc.)