Recently, a Chicago federal judge dismissed a lawsuit against the Financial Industry Regulatory Authority (FINRA) saying that it cannot be sued by brokers who claim an unfair arbitration against their former firms. Nicholas Webb and Thad Beversdorf had filed a breach of contract suit against their former employer, Jeffries & Co. Inc. claiming FINRA failed “to enforce and promote just and equitable principles of trade and business, to maintain high standards of commercial honor and integrity and to prevent fraudulent and manipulative acts and practices” and “to create fair, just and equitable results for disputes to be decided on their merits.” The judge dismissed the suit with prejudice on the grounds that FINRA possessed arbitral immunity. Webb and Beversdorf were fired by Jeffries and Co. in October 2013 for alleged “poor performance.” The men then alleged breach of contract, retaliation, violations of wage and hour statutes and fraudulent conduct. They then concurrently sued FINRA for breach of contract, alleging FINRA violated its contract with them by failing to provide arbitrators with the proper authority, procedural mechanisms, discretion and training to “facilitate a just and equitable resolution of the pending disputes.”
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