Comedians Will Ferrell and Larry David, along with other investors, have been ordered to pay $600,000 in arbitration legal fees and costs to investor units of JP Morgan Chase & Co.
The actors’ claim in the Financial Industry Regulatory Authority arbitration, filed in 2008, accused the firm of “unauthorized and unsuitable purchases of [$18 million in] unspecified preferred securities.”
The claimants sought recission. The three-arbitrator Finra panel denied the claim on Nov. 12 and awarded the fees.
The opinion can be found here.
An award for a brokerage's legal fees is “beyond unusual,” according to Jonathan Uretsky, a New York lawyer who represents financial firms in Finra procceeding, in a Wall Street Journal online article last week. “It's about time,” he said, adding, “I think this should happen more often.”
According to Uretsky, the fee award is more than the typical cost of arbitration defense. JP Morgan Chase had requested $650,000 in attorney's fees.
The panel also held Ferrell, David--who had invested under a trust and was acting in a trustee's capacity--and the other claimants liable for discovery abuses and failure to comply with Finra’s discovery rules and procedures.
They were ordered to pay J.P. Morgan Chase an additional $22,500. The opinion, which didn’t give a reason for finding in J.P Morgan Chase’s favor, noted in making the discovery abuse award that “After three motions to compel discovery by Respondent and three orders from the Panel, Claimants were still supplying ordered documents on the afternoon of the second day of the evidentiary hearing.”
The panel also ordered that the claimants had to pay the full amount of the session fees, totaling $14,400. Session fees are normally paid equally by the parties.
–Darren Bleier, CPR Intern