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You are a lawyer representing FINRA member Freedom Investments in a case brought by a former client, Bruce Lee. When Lee opened his account with
You are a lawyer representing FINRA member Freedom Investments in a case brought by a former client, Bruce Lee.
- When Lee opened his account with Freedom, he signed an arbitration agreement in which he agreed to resolve all claims against Freedom Investments by filing a case in a court of competent jurisdiction.
- The agreement also included prohibitions against Lee's (a) filing a class action and (b) requesting punitive damages.
- The client has filed a FINRA arbitration claim against the Firm and the registered representative who handled the accounts at Freedom, Betty Ting, alleging damages of $150,000 based on claims of unsuitability, churning, breach of fiduciary duty and failure to supervise.
Based on the details provided above, please answer the following questions.
- Freedom Investment's arbitration agreement complies with FINRA rules. Do you agree or disagree? Please explain your answer.
- Freedom Investments is free to file an action in court objecting to FINRA arbitration without running afoul of FINRA guidance.
- Please state whether you agree or disagree and explain your answer.
- Please discuss the primary difference between a motion to recuse and a challenge for cause against an arbitrator who decides the motion.
- Which dispositive motion(s) should Freedom Investments consider filing prior to the hearing if any? Explain the reasons why you believe a particular motion should be made. If you do not believe any motions should be filed, explain why.
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