WASHINGTON (November 10, 2008) – For the first time in more than a decade, the SEC set aside a FINRA case that found two registered representatives had violated the NASD rule on “selling away," which is also referred to as private securities transactions. In a case involving representatives James W. Browne and Kevin Calandro, NASD (FINRA's predecessor) had suspended Browne for six months and fined him $25,000 and had suspended Calandro for three months and fined him $5,000. The SEC reversed NASD, finding that it was "presenting new theory of liability." The SEC found no legal support for that theory and no evidence to substantiate the charges or to uphold the sanctions that had been imposed by an NASD Hearing Panel and affirmed by NASD's National Adjudicatory Council.
Brian L. Rubin, a partner in Sutherland’s Washington, D.C., office, served as Browne's lead attorney. Rubin stated that Browne is "obviously thrilled. This case has been hanging over his head for years, and he is happy to finally be vindicated. This case confirms that firms and representatives should think long and hard before they decide to settle with FINRA."
Rubin, formerly NASD's Deputy Chief Counsel of Enforcement, is the co-author of several articles that show through a statistical analysis that it often pays to litigate against FINRA. Rubin was awarded the Burton Award for Legal Achievement for one of those articles. Also representing Browne were Shanyn L. Gillespie of Sutherland and Christopher Bebel. E. Steve Watson represented Calandro. For a a copy of the decision, click here.
Inquiries related to this press release may be directed to Brian L. Rubin at 202.383.0124 or firstname.lastname@example.org.
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