New York Clearing Agency Defeats Multimillionaire in FINRA Arbitration


Albany, N.Y.-based self-clearing dealer/vendor C.L. King & Associates received a uncommon victory this week in a Monetary Trade Regulatory Authority arbitration. The claimant within the case was a holding firm of multimillionaire businessman Carl Cummings, which sought $40 million in damages towards C.L. King but walked away with nothing. It was a two-to-one choice in favor of C.L. King.

That is the most recent in a string of FINRA arbitration instances stemming from the implosion of NSB Advisors, a registered funding advisor owned by William Nicklin that filed for chapter in 2015. The entity suing, Utility Service Holding Firm, a holding firm for Cummings’ investments, blamed C.L. King, the custodial brokerage for NSB, for permitting the RIA to place him into difficult funding methods that imploded. That included an alleged over-concentration in APCO Oil and Gasoline, quick choices publicity and margin debits. The swimsuit additionally alleges illegal securities transactions made by Candace King Weir, CEO of C.L. King.

“Typically in arbitration, arbitrators challenge equity, not justice; you go earlier than a decide, with a robe and a gavel behind a bench, they challenge justice,” stated Richard Roth, legal professional at The Roth Legislation Agency in New York that represented C.L. King. “So the truth that they bought zeroed out, I believe it’s fairly uncommon.”

The arbitration declare alleged breach of contract, violation of FINRA and NASD guidelines, breach of fiduciary responsibility, and aiding and abetting breach of fiduciary responsibility. All claims had been denied. Claims towards Weir had been dismissed.

“Her restricted involvement on points associated to respondent CLK’s relationship with Claimant had no influence on the problems associated to this case,” the award stated. “Furthermore, the Panel discovered that she took no impartial motion outdoors of her function as CEO that would go away her liable individually.”

The arbitration went on for 109 listening to classes during the last 12 months, racking up practically $137,000 in listening to charges, cut up between the 2 events.

“Whereas actually I don’t agree that it ought to’ve taken that lengthy, for some purpose the legal professionals for the claimants desired to undergo an amazing quantity of element, which, fairly frankly, I believed was not obligatory,” Roth stated.

“We had been disillusioned on this choice,” stated J. Michael Bishop, a companion at Smiley Bishop & Porter, which represented Cummings. “It’s uncommon to see cut up selections in FINRA instances, the place you have got an arbitrator dissenting. It was a hard-fought case.”

C.L. King got here out victorious in an analogous arbitration case towards the agency final 12 months, when estates linked to Lynn Gorguze, the spouse of California Congressman Scott Peters, sought $68 million in damages within the fallout of NSB.


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