A recently decided Financial Industry Regulatory Authority (FINRA) arbitration case has caused commotion in the financial industry over its invocation of elder abuse in its arbitration decision. Though often used in claimant complaints, elder abuse is rarely cited by arbitrators when awarding damages. The complaint, filed against StockCross of Beverly Hills, California by a 95-year old client, charged the firm with breach of fiduciary duty and elder abuse, among others.
By sustaining elder abuse in a decision, arbitrators can award treble damages, allowing the sum of the damage amount to be tripled and added to the original damage amount. In this case, the arbitrators elected to invoke that privilege, citing the Financial Elderly Abuse Act: California Welfare & Institutions Code15600, et seq. The award therefore went from around $300, 000 to more than $1.2 million.
Unsurprisingly, StockCross has already filed a motion to vacate in an effort to avoid paying the award amount. Such motions, however, are often ineffective in reversing the binding arbitration decision.
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