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FINRA Removes Securities Arbitrator From its Roster for Allegedly Lying About Being a Lawyer

According to Reuters and other news sources, a securities arbitrator has been removed from FINRA’s arbitrator roster after it was discovered that he allegedly lied about being a lawyer. A FINRA spokesperson reportedly confirmed to Reuters that securities arbitrator James H. Frank of Santa Barbara, California was removed from FINRA’s arbitrator pool in 2013.  Frank reportedly served as a FINRA arbitrator for 15 years and was involved in rendering approximately 38 FINRA arbitration awards.  

According to Reuters, in August 2013 after a FINRA arbitration hearing concerning an investment in a variable life insurance policy, the investor’s attorney Benjamin Blakeman became concerned about Frank’s behavior and hired an investigator to look into Frank’s background.  According to Frank’s Arbitrator Disclosure Report, he had received his law degree from Southwestern University School of Law and was licensed to practice in Florida, California, and New York.   Frank’s bio on Arias-U.S. reflects that he is Of Counsel with Proresolv Counsel, LLP.

According to InvestmentNews, Blakeman’s investigator discovered that the only California lawyer named James H. Frank was not the gentlemen serving as a FINRA arbitrator.  In addition, there were no lawyers by the name of James H. Frank registered in either Florida or New York.  Blakeman reportedly shared his investigator’s findings with FINRA and requested Frank’s removal from his arbitration case.

FINRA confirmed to InvestmentNews that it removed Frank from its arbitrator roster because he had allegedly misrepresented himself as an attorney.  FINRA declined to comment on whether it has disclosed the alleged misrepresentation to the parties involved in the cases Frank heard.  At this point, it is unclear whether the parties on those cases could attempt to overturn the arbitration awards on the grounds that an arbitrator made fraudulent misrepresentations, given the requirement in the Federal Arbitration Act that motions to vacate be filed within three months after the delivery of the award.

Frank reportedly told Reuters in an e-mail that he was unaware of the specific reasons for his removal by FINRA.  He claimed that he was a lawyer in California, but the state of California must have lost his records.

To read more about FINRA arbitration, click here.