SPARTAN CAPITAL Seeks to Enjoin FINRA Arbitration Over IneedMD Losses
Spartan Capital Securities Seeks to Enjoin FINRA Arbitration Over IneedMD and Losses
In November 2018, the Southern District of New York rendered in a decision in Spartan Capital Securities LLC v. Stonbely, Case No. 18-CV-6819. Stonbely filed a FINRA arbitration claim against Spartan Capital Securities, alleging $87,000 in investment losses, as well as an additional $50,000 in losses investing in a company called IneedMD. Spartan provided investment banking services to IneedMD and acted as its “exclusive placement agent” for IneedMD, according to the findings by the Southern District of New York. After IneedMD’s stock price fell (which now sits at $.05 per share with no trading volume), Stonbely filed his claim.
Spartan Capital sought to enjoin the FINRA arbitration, and the Southern District of New York found that Spartan Capital had entered into agreements with arbitration clauses with Stonbely. As such, Spartan’s motion to enjoin the arbitration was denied, and Stonbely’s cross-motion to dismiss Spartan’s complaint for injunctive relief was granted, effectively allowing the FINRA arbitration to continue.
Brokerage firms like Spartan Capital Securities have a responsibility to adequately supervise all representatives who are registered through their firm. Brokerage firms also must take steps to ensure that their financial advisors follow all securities rules and regulations, as well as internal firm policies. When brokerage firms fail to adequately supervise their registered representatives, they may be liable for investment losses sustained by customers.
Israels & Neuman PLC is a securities and investment fraud law firm with offices in Denver, Colorado; Seattle, Washington; and Ann Arbor, Michigan. We represent investors in FINRA arbitration proceedings in all 50 states, including numerous investors in New York in the past. Our attorneys have represented over one thousand investors against many brokerage firms in the past.
Click to view: Spartan Capital Securities LLC v Stonbely