Finra arbitrator removed for allegedly lying about credentials

James H. Frank, who had served on Finra panels for almost 15 years, was removed after it was discovered he was not a lawyer

Mar 25, 2014 @ 2:59 pm

By Mason Braswell

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A veteran arbitrator who helped decide more than 40 cases over a 15-year period has been removed by Finra amid allegations that he misrepresented himself as an attorney.

The Financial Industry Regulatory Authority Inc. has scratched James Hamilton Hardy Frank from its list of arbitrators in a move that raises questions about the awards that he oversaw, and adds to concerns over the regulator's vetting process for its more than 6,000 arbitrators.

“One would have to hope that these are aberrations and that the arbitrators are disclosing accurate information on their disclosure reports,” said Scott Ilgenfritz, a claimant's attorney with Johnson Pope Bokor Ruppel & Burns. “But it does certainly cause some concern for both claimants and respondents.”

Mr. Frank, a resident of Santa Barbara, Calif., oversaw more than 40 arbitration cases dating back to 1998 and was still active on a number of cases at the time of his removal, according to his disclosure form. Some of the cases over which he presided included some of the nation's largest brokerage firms, such as Morgan Stanley, Wells Fargo & Co. and Fidelity Investments.

Mr. Frank had reported on his disclosure forms that he had obtained his law degree from Southwestern University and was licensed to practice in Florida, California and New York.

But an investigation by an attorney who represented the claimants in one of his cases, however, found that Mr. Frank had never been registered with any bar association and there was no record of his graduating from Southwestern.

Further details were uncovered after Benjamin Blakeman, an attorney for a 72-year-old claimant in a life insurance case against Ameriprise Financial Services Inc., became suspicious of Mr. Frank's credentials and decided to hire a private investigator.

“The guy was acting pretty weird,” Mr. Blakeman said in an interview. “I started going through the credentials that had been sent to us, and the first thing I checked was the state bar website, and it turned out there was somebody with a similar name.”

He found that there was another James Hamilton Frank who had graduated from Southwestern University and was registered to practice in California. That James Hamilton Frank, however, was never certified as a Finra arbitrator.

Mr. Blakeman said that the removed Mr. Frank had impersonated some of the details, including the education and license, of James Hamilton Frank.

The Mr. Frank licensed with Finra did not return calls or e-mails requesting comment. His website says that he is employed with Proresolv Counsel and is also licensed by the AIDA Reinsurance and Insurance Arbitration Society.

Mr. Blakeman said his investigation turned up no records of Proresolv.

He said Mr. Frank was removed from his case almost a month after he requested his dismissal last August. A replacement was appointed.

Mr. Blakeman's claims against Ameriprise were ultimately denied in an award dated March 4, but he said his clients decided not to appeal because of the additional time and legal costs.

It is unclear whether those involved in other cases over which Mr. Frank presided may have a right to appeal. The Federal Arbitration Act of 1925 gives parties 90 days to appeal an award. There may be an argument on equitable grounds or another defense that could possibly provide for an extension, according to Mr. Ilgenfritz.

Finra spokeswoman Nancy Condon did not return calls requesting comment, but the agency confirmed to Reuters that Mr. Frank had been removed for misrepresenting himself as an attorney.

Finra has been focused on refining its process for vetting its arbitrators after a couple of high-profile cases last year in which arbitration awards have been overturned.

In one case involving The Goldman Sachs Group Inc., U.S. District Judge J. Curtis Joyner in the Eastern District of Pennsylvania, threw out a case after the claimant discovered that one of the arbitrators had been indicted.

Finra has said it will now conduct yearly reviews of its arbitrators rather than vetting them once when they apply.

News of Mr. Frank's removal was first reported last Friday by the San Francisco Daily Journal.

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