March 23, 2022
Attorney Thomas Mauriello prevailed on a motion to dismiss his client’s FINRA arbitration case filed by brokerage firm National Planning Corporation. The San Francisco-based arbitration panel of three arbitrators heard argument on the motion and issued an order denying the motion on the same day. NPC argued that the client’s claims were barred by FINRA Rule 12206(a), which states: “No claim shall be eligible for submission to arbitration under the Code where six years have elapsed from the occurrence or event giving rise to the claim.” NPC based its motion to dismiss on the fact that the NPC representative recommended and sold the client a variable annuity more than six years prior to the filing of the client’s claim. The arbitration panel agreed with the argument by Mr. Mauriello that the recommendation was part of an “investment strategy” that continued after the sale of the specific annuity based on FINRA Rule 2111(a), the “suitability” rule, which requires brokerage firms and registered representatives to carefully consider their recommendations not only in terms of specific transactions, but also in terms of “investment strategies.” Rule 2111(a) states: “A member or an associated person must have a reasonable basis to believe that a recommended transaction or investment strategy involving a security or securities is suitable for the customer, based on the information obtained through the reasonable diligence of the member or associated person to ascertain the customer’s investment profile.” (emphasis added.)
Attorney Thomas Mauriello has represented numerous clients who were sold unsuitable variable annuities, as well as many other investment-related issues, during his more than 30 years of law practice. If you have a problem with a variable annuity, or if you have concerns about other investment recommendations made by your securities brokerage firm, investment advisor firm, or insurance agent, contact the Firm for a confidential and free consultation.