Litigation and War – Managing Expectations

As a career business litigator, I have handled, literally, hundreds of commercial disputes for my clients.  Whether being involved in bet-the-company type litigation, where the stakes and the legal fees are high, or when appearing at Pretrial Conferences for clients in courts of limited jurisdiction, one thing is constant, the unknown.  You don’t know how long it is going to take to resolve the case, you don’t know how much it is going to cost, you don’t know how badly the other side wants to fight, and you don’t know what the Judge is going to think of the merits of your case or the other side’s position.

Litigation is like war on a smaller, more “civilized” scale.  America right now is passively watching in horror as bloody battles rage across the globe.  Fighting for autonomy from Russia is intensifying in southern Ukraine.  A costly civil war that started in Syria is now spilling into war torn Iraq.  Reports of hundreds of thousands of civilians, dying, being forced from their homes, and caught in the cross fire of these conflicts fill the press.

Thousands of Hamas rockets were launched from the Gaza strip into Israeli cities, which were intercepted by the American financed Iron Dome.   It appeared that Israel had their dispute under control. However, reports reveal that what the Israeli intelligence did not know was that its neighbor had dug several miles of interconnected underground tunnels deep into Israel in order to one day, by surprise, surface and inflict bloodshed and devastation on its civilian population.

Civilian casualties are mounting, in nations worldwide, as a result of these conflicts.  When will it end, how many more days, weeks, months, deaths, before it stops.  All . . . unknown.

In litigation, anyone that thinks they can go into battle with an adversary and know what will happen, should take lessons from these large scale military conflicts. Litigation, like war, is unpredictable. No litigant enters into a legal dispute with a guaranty of victory. Just like the conflicts described above, if you sue or are sued, it is unknown how long the fight will last, how much time it will take for your lawyer to prepare, research, study, and execute any strategy or properly respond to a lawsuit. Nor does any litigant know how long the other side is willing to fight for what they believe in.

Besides the adversary, the courts need to move their dockets forward.  There is no “ceasefire” in litigation.  You cannot put your case on hold.  If the parties can settle their dispute, then the case is over.  Otherwise, the battle goes on, and on, until one side or the other either wins, or runs out of money to finance the fight.  I cannot tell you how many times I have heard my clients say that they would rather pay me as their lawyer to fight with the other side than to give in and resolve this dispute with the adversary.  I always remind my client that a resolution of a dispute assures an end to the legal battle, which is never guarantied when the fight goes on.

A good lawyer tries to keep his client out of trouble.  Sometimes, it does not matter what the lawyer does, the client will find themselves in court and they have to deal with the conflict.

The next time a client tells me what they think is going to happen if they go to court, I will remind them of the tunnels that the Israelis, with all of their American technology, did not even know existed right below their feet.  If a country that spends literally billions of dollars a year on its national security and defense, has some of the most sophisticated counter-terrorism systems in the world, does not even know that its hostile neighbor is and has been lurking deep into its land and preparing for wholesale bloodshed, what can my client really know of the intentions and capabilities of another litigant.

The lifeblood of litigation, like war, is the unknown.

For more information about business litigation and strategies contact:

ERIC N. ASSOULINE, ESQ.
Telephone: 954-929-1899

With offices in Miami, Ft. Lauderdale, and Boca Raton

ASSOULINE & BERLOWE, P.A.

http://www.assoulineberlowe.com

Intellectual Property, Labor & Employment Law, Bankruptcy, Commercial Litigation, and Corporate Law

Litigation and War – Managing Expectations

As a career business litigator, I have handled, literally, hundreds of commercial disputes for my clients.  Whether being involved in bet-the-company type litigation, where the stakes and the legal fees are high, or when appearing at Pretrial Conferences for clients in courts of limited jurisdiction, one thing is constant, the unknown.  You don’t know how long it is going to take to resolve the case, you don’t know how much it is going to cost, you don’t know how badly the other side wants to fight, and you don’t know what the Judge is going to think of the merits of your case or the other side’s position.

Litigation is like war on a smaller, more “civilized” scale.  America right now is passively watching in horror as bloody battles rage across the globe.  Fighting for autonomy from Russia is intensifying in southern Ukraine.  A costly civil war that started in Syria is now spilling into war torn Iraq.  Reports of hundreds of thousands of civilians, dying, being forced from their homes, and caught in the cross fire of these conflicts fill the press.

Thousands of Hamas rockets were launched from the Gaza strip into Israeli cities, which were intercepted by the American financed Iron Dome.   It appeared that Israel had their dispute under control. However, reports reveal that what the Israeli intelligence did not know was that its neighbor had dug several miles of interconnected underground tunnels deep into Israel in order to one day, by surprise, surface and inflict bloodshed and devastation on its civilian population.

Civilian casualties are mounting, in nations worldwide, as a result of these conflicts.  When will it end, how many more days, weeks, months, deaths, before it stops.  All . . . unknown.

In litigation, anyone that thinks they can go into battle with an adversary and know what will happen, should take lessons from these large scale military conflicts. Litigation, like war, is unpredictable. No litigant enters into a legal dispute with a guaranty of victory. Just like the conflicts described above, if you sue or are sued, it is unknown how long the fight will last, how much time it will take for your lawyer to prepare, research, study, and execute any strategy or properly respond to a lawsuit. Nor does any litigant know how long the other side is willing to fight for what they believe in.

Besides the adversary, the courts need to move their dockets forward.  There is no “ceasefire” in litigation.  You cannot put your case on hold.  If the parties can settle their dispute, then the case is over.  Otherwise, the battle goes on, and on, until one side or the other either wins, or runs out of money to finance the fight.  I cannot tell you how many times I have heard my clients say that they would rather pay me as their lawyer to fight with the other side than to give in and resolve this dispute with the adversary.  I always remind my client that a resolution of a dispute assures an end to the legal battle, which is never guarantied when the fight goes on.

A good lawyer tries to keep his client out of trouble.  Sometimes, it does not matter what the lawyer does, the client will find themselves in court and they have to deal with the conflict.

The next time a client tells me what they think is going to happen if they go to court, I will remind them of the tunnels that the Israelis, with all of their American technology, did not even know existed right below their feet.  If a country that spends literally billions of dollars a year on its national security and defense, has some of the most sophisticated counter-terrorism systems in the world, does not even know that its hostile neighbor is and has been lurking deep into its land and preparing for wholesale bloodshed, what can my client really know of the intentions and capabilities of another litigant.

The lifeblood of litigation, like war, is the unknown.

For more information about business litigation and strategies contact:

ERIC N. ASSOULINE, ESQ.
Telephone: 954-929-1899

With offices in Miami, Ft. Lauderdale, and Boca Raton

ASSOULINE & BERLOWE, P.A.

http://www.assoulineberlowe.com

Intellectual Property, Labor & Employment Law, Bankruptcy, Commercial Litigation, and Corporate Law

Resolving Investor and Broker/Dealer Disputes

Securities disputes are traumatic. The loss of investment capital can be devastating whether one is a sophisticated investor in search of capital appreciation or a retail customer looking for a safe haven for retirement funds.

The subprime real estate meltdown, an accompanying sharp decline in securities valuations, and a host of well-publicized, questionable (in some cases illegal) business practices in the financial markets resulted in systemic economic dislocations. The so-called “Great Recession” brought into sharp focus individual investor risk of loss as well as a sharp increase in customer and broker/dealer disputes.

The Financial Industry Regulatory Authority (FINRA), the successor to the National Association of Securities Dealers, Inc.’s (NASD), is the non-governmental, self-regulatory organization regulating New York Stock Exchange brokerage firms and the exchange markets. FINRA monitors 6 billion share trades a day. With 20 offices across the United States and 3,400 employees, the Authority writes and enforces rules governing more than 4,145 securities firms and 636,290 brokers.

FINRA’s dispute resolution forum is the largest in the country for the securities industry, handling nearly 100 percent of securities-related arbitrations and mediations from more than 70 hearing locations—including at least one in all 50 states, London and Puerto Rico.  Its District 7 Office in Boca Raton covers Florida, Puerto Rico, Panama, and the Virgin Islands.

In 2012, FINRA referred 692 fraud cases for prosecution, and levied $102 million in fines and restitution against fraudulent traders.  Through November 2013

4,181 arbitration cases were resolved (18% after hearing; 5% after document review; 52% by parties’ settlement; and 10% in mediation) and 3,342 new cases were filed. During the same period, 513 mediation cases were closed (80% of which settled) 451 new disputes filed.

The following Tables reflect FINRA’s latest dispute resolution statistics.

Arbitration Cases Served by Controversy Involved

Type of Controversy1 2009 2010 2011 2012 November 2013 Margin Calls 128 83 80 68 46 Churning 306 270 236 245 219 Unauthorized Trading 478 397 288 313 240 Failure to Supervise 2,691 2,372 2,007 1,657 1,364 Negligence 3,405 2,698 2,249 1,941 1,570 Omission of Facts 2,453 1,941 1,603 1,355 1,128 Breach of Contract 2,802 2,184 1,904 1,573 1,300 Breach of Fiduciary Duty 4,206 3,162 2,589 2,216 1,728 Unsuitability 2,473 1,974 1,619 1,354 1,144 Misrepresentation 3,408 2,601 2,102 1,769 1,398 1 Each case can be coded to contain multiple controversy types.   Therefore the columns in this table cannot be totaled to determine the number   of cases served in a year.

Security Types Involved in Arbitration Cases

Type of Security1	2009	2010	2011	2012	November   2013
Corporate Bonds	373	239	179	124	79
Certificates of Deposit	71	41	31	31	30
Mutual Funds	1,556	863	652	392	289
Options	275	161	161	151	106
Common Stock	1,367	862	838	736	511
Limited Partnerships	73	80	104	70	79
Annuities	300	208	172	147	113
Preferred Stock	481	232	197	112	81
Variable Annuities	300	279	212	220	165
Derivative Securities	607	228	54	8	0
Auction Rate Securities	276	149	80	58	27

1 Each case can be coded to contain multiple security types. Therefore the columns in this table cannot be totaled to determine the number of cases served in a year.

As an alternative to litigation, FINRA arbitration, generally confidential, proceeds with the convening of a panel comprised of one or three arbitrators selected by the parties. Each party, either represented by counsel or proceeding pro se, submits written pleadings to the arbitrators setting his or her claim or defense. After considering the pleadings, the panel will consider any documentary evidence and under oath testimony at a formal hearing. Thereafter, the arbitrator or arbitrators, as the case may be, will issue a formal award that is binding on the parties. The prevailing party can then submit the award to the appropriate court for enforcement. And, unless challenged on very limited grounds, the court will not overturn the award.

Arbitration cases are eligible to be heard in FINRA’s forum if the following criteria are met:

• For disputes with investors:
  • The cases involve an investor and an individual or entity registered with FINRA, such as cases between investors and brokers, between investors and brokerage firms, and between investors and brokers and brokerage firms; and
  • The claim is filed within 6 years from the time the events giving rise to the dispute occurred.

• For disputes involving industry parties only:
  • The cases involve an individual or entity registered with FINRA, such as cases between brokerage firms, between brokers, and between or among brokerage firms and brokers; and
  • The claim is filed within 6 years from the time the events giving rise to the dispute occurred.

An investor must arbitrate at FINRA if:

• The arbitration is required by written agreement;
• The dispute is with a member of FINRA, which could be a broker and/or brokerage firm; and
• The dispute involves the securities business of the broker and/or brokerage firm.

A broker or a brokerage firm must arbitrate at FINRA if:

• The dispute arises out of the securities business activities of a broker and/or a brokerage firm; and
• The dispute is between or among the following members of FINRA: brokerage firms, brokerage firms and brokers, or brokers.

If an investor requests arbitration, a broker or a brokerage firm must arbitrate at FINRA.

Either during or as an alternative process and by mutual agreement, the parties may submit their dispute to mediation. In such case, FINRA staff facilitates the mediation process and provides a roster of qualified mediators from which a mediator is selected to facilitate the parties’ discussions towards a mutually agreeable resolution. Mediation is confidential and non-binding until resolution.

For more information, please visit www.finra.org and contact:

Carl H. Perdue

Senior Counsel and Partner

ASSOULINE & BERLOWE, P.A.

1801 N. Military Trail, Suite 160

Boca Raton, Florida 33431

Main:  (561) 361-6566

Fax: (561) 361-6466

Email: CHP@assoulineberlowe.com

http://www.assoulineberlowe.com/

Intellectual Property, Labor & Employment Law, Bankruptcy, Commercial Litigation, and Corporate Law

Miami • Ft. Lauderdale • Boca Raton