Investor Rights Clinic Fellows Present Mock Arbitration Problem Before FINRA Arbitrators


Neda Ghomeshi and Jacqueline Aleman

For the third year in a row, Miami Law’s Investor Rights Clinic was invited to conduct a mock arbitration presentation at the Palm Beach County Bar Association’s Annual Securities Law CLE program. Each year, the Palm Beach program provides an overview and updates on the procedural and substantive law of securities arbitration to attorneys in Palm Beach County.

The program included the students’ argument of a mock arbitration problem, designed to highlight a controversial or cutting-edge issue. The students made the presentation before arbitrators on the Financial Industry Regulatory Authority arbitrators. FINRA operates the largest securities arbitration forum in the U.S.

The presentation this year took place on April 7, 2016. Clinic fellows Jacqueline Aleman and Neda Ghomeshi argued before a panel of six FINRA arbitrators.

The problem, Santana v. Wellstone Securities of Islandia, presented a fictional version of the issues raised in hundreds of arbitration cases filed in Puerto Rico arising from investments in largely tax-free, closed-end funds concentrated on the Island’s debt. The students raised similar claims and defenses and presented alternative damages analyses designed to probe the panel’s thoughts on the underlying theories of the claims and computation of compensation.

After the mock presentation, the panel presented its award, conclusions and answered questions about their individual impressions and thought processes in making their decision. The panel participants all found in favor of the claimant, a widow whose savings had been placed in highly leveraged funds concentrated in debt, and awarded her compensatory damages, including market adjusted damages and, in one case, punitive damages.

“Presenting a closing argument in front of a panel of arbitrators was an invaluable experience,” said Ghomeshi. “We had the unique opportunity of hearing how arbitrators evaluate a case.”  

 “Even though it was a mock arbitration, the opportunity to present in front of real FINRA arbitrators made it so much more real,” said Aleman.

Teresa Verges, the Clinic’s Director, explained “participation in the program allows the Clinic to showcase its talented students while gaining new insights on FINRA arbitration. Because arbitration is a private forum, the program offers a rare opportunity to probe the deliberation and thought processes of an arbitration panel on select issues.”