Pre-Conference Workshop
Monday, May 23, 2005
2:00 pm - 5:30 pm (Registration begins at 1:30 pm)
What's The Case Worth? A Systematic and Quantitative Approach to Case
Assessments
E. Scott Douglas
Principal, Douglas Mediation (Manhattan Beach, CA)
Lilian Morvay
Director, CNA Global Specialty Lines (New York, NY)
Aegis Frumento
Partner, Duane Morris LLP (New York, NY)
While many factors can go into the decision whether and for how much to settle a case, the basic question always is "How much is the claim worth?" The answer to that question often comes from the collective judgment of the lawyers, clients, and claims adjusters involved, with nothing to support that judgment but their own intuition. However, when deciding to settle a high-dollar-value case, something more than educated guesses should come into play. By applying basic principles of decision analysis and probability theory in assessing the likely outcome, the defense can determine when and at what cost settlement is the best decision.
This unique workshop has been updated and streamlined specifically for defense attorneys, in-house counsel, insurance claims adjusters, mediators and arbitrators. The workshop leaders will immerse you in the theory and practice of determining the value of claims using mathematical analyses and principles. The results will be real dollars-and-cents settlement ranges that are more than "educated guesses". These numbers can be dissected, scrutinized and perfected until everyone on the defense team is comfortable that their bottom-line settlement number is as fair and reasonable as can be determined. Among the topics that will be covered are:
- The importance of accurate case assessments
- Settlement as an act of
- clairvoyance: guessing what arbitrators will do
- insurance: buying the down-side
- frugality: saving legal fees
- gaming: playing the odds
- Probability theory for lawyers
- the use and misuse of math-to-value cases towards more educated guesses
- handicapping a case using more than intuition
- Decision-tree analyses of claim and defense elements
- "Weighing" the evidence as more than a metaphor
- Determining overall probabilities of winning
- Deriving "expected values," and what that means
- The role of judgment
- Legal fees and other costs to consider
- Establishing "reasonable" settlement values – and assessing their reasonableness
- Preparing a case assessment – a hands-on tutorial
- Using case assessments in settlement and mediation
Don't miss this opportunity to learn how to make your valuation of cases more
precise, giving you additional leverage in negotiating settlements and more
confidence in the fairness of the outcome.
Tuesday, May 24, 2005
7:00 Registration & Continental Breakfast
8:00 Co-Chairs' Opening Remarks
Daniel Greenstone
Director of Litigation, U.S. Region and Vice President
CIBC World Markets Corp. Inc. (New York, NY)
Aegis Frumento
Partner, Duane Morris LLP (New York, NY)
8:15 Regulatory Developments in Securities Enforcement: What Will Drive the Next Wave of Customer Claims?
Robert S. Clemente
Counsel, Liddle & Robinson, L.L.P.
(Former Director of Arbitration, NYSE)
(New York, NY)
Terryl Brown Clemons
Assistant Deputy Attorney General, Division of Public Advocacy, Office New York State Attorney General (New York, NY)
Kenneth A. Cowin, CFA
Chief Executive Officer
Strategic Analysis and Consulting, LLC
(Former Head of Compliance, Bear Stearns)
(New York, NY)
David E. Robbins
Partner, Kaufmann, Feiner, Yamin, Gildin & Robbins LLP (New York, NY)
David Gourevitch (moderator)
Law Offices of David U. Gourevitch P.C. (New York, NY)
- Determining the current SRO standards on:
- research and advertising
- continuing education for brokers
- specific supervision issues with registrations
- short selling
- statutory disqualification
- undisclosed settlements
- trade reporting
- outside business activities
- private securities transactions
- Regulatory intervention and disciplinary action regarding discovery abuse
- NASD Code of Arbitration reform – what you need to know
- What the recent volume of "selling away" cases means for your firm
- Investigation update
- impact of recent scandals on new investigations
- what the rapid increase in cases before the NASD and NYSE means for
broker-dealers
- Differential compensation and the NASD reaction
- Fair dealing with customers vs. disclosure: regulatory efforts
Winning on Substance: Tactical Defenses Against the Latest Claims
Building on the overview of the latest enforcement actions that drive the bulk of the claims, expert speakers from some of the largest broker-dealers and leading outside counsel will discuss practical strategies and offer hypothetical situations to help you prevail on the substance of the most commonly arbitrated claims.
9:30 Disproving Allegations of Broker Misconduct in Suitability, Misrepresentation, and Unauthorized Trading
Daniel Greenstone
Director of Litigation, U.S. Region and Vice President
CIBC World Markets Corp. Inc. (New York, NY)
Aegis Frumento
Partner, Duane Morris LLP (New York, NY)
Pete S. Michaels
Partner, Michaels & Ward LLP (Boston, MA)
This in-depth panel will teach you the most successful approaches for identifying and defending the most common and critical customer claims brought against Broker/Dealers. In addition to reviewing the major sources of a broker's obligations (contracts, common law, statutes, and SRO regulations), you will learn the best methods to counter customer claims alleging unauthorized trading and conversion, control or influence to take advantage of customers (suitability and churning), misrepresentation and omissions, negligence of fiduciary duties, and vicarious liability of firms (supervision, control and respondeat superior issues).
10:30 Coffee Break
10:45 Minimizing the Potential for Claims of Independent Broker/Dealer Misconduct
Paul Matecki, Esq.
General Counsel & Director of Compliance
Raymond James Financial, Inc. (St. Petersburg, FL)
Mark Quinn
Senior Vice President and General Counsel, Royal Alliance Associates, Inc.
Ellen Slipp
Director, Head of Litigation
The Citigroup Private Bank, Citigroup N.A. (New York, NY)
Bill Briendel
Partner, Greenberg Traurig LLP (New York, NY)
Michael Schwartzberg
Partner, Winget, Spadafora & Schwartzberg, LLP (New York, NY)
James D. Yellen (moderator)
Executive Director, Legal Division
Morgan Stanley (New York, NY)
- The Independent Broker/Dealer model
- pros, cons and hidden dangers
- Supervising remote branch offices
- extent of firm's supervisory obligations (including NASD Rules 3010, 3012 and 3013) – securities
vs. non-securities products
- documenting effective supervision
- defending the firm that failed to adequately supervise
- Selling away and outside business activities
- types of products to be weary of
- best defenses procedurally and substantively
- preemptive tactics
- New and upcoming developments
- arbitrating against the customer you never knew you had
12:00 Networking Luncheon
1:00 Special Considerations When Addressing Claims of Misconduct in Variable Annuities, Mutual Funds and Hedge Funds
Paul Matecki, Esq.
General Counsel & Director of Compliance
Raymond James Financial, Inc. (St. Petersburg, FL)
Nina Schloesser McKenna
Chief Counsel
ING Americas US Legal Services (Mission Hills, KS)
Michael Schwartzberg
Partner, Winget, Spadafora & Schwartzberg, LLP (New York, NY)
- Product overview – subtleties in claims between variable annuities and mutual funds
- why the volume of claims filed has increased
- Regulatory focus and the latest NASD enforcement actions
- an update on Notices to members
- the effects of the SEC/NASD Joint Report on Examination Findings:
- proposed rule governing the purchase, sale, or exchange of variable
annuities
- Suitability and sales practices
- what is the relevant criteria?
- unsuitable "switching"
- ensuring full disclosure – methods for maintaining books and records
- Supervision issues: internal controls and preempting claims
- Assessing the case – criteria to review in analyzing the recommendations in light of customer objectives
2:00 Countermeasures for Claims Stemming from the Tech Wreck
Daniel Greenstone
Director of Litigation, U.S. Region and Vice President
CIBC World Markets Corp. Inc. (New York, NY)
William Briendel
Partner, Greenberg Traurig LLP (New York, NY)
- Defenses to unsuitable recommendations and unsuitable transactions
- Is there a duty for the broker to protect the customer from himself?
- Can the tech wreck-related claim be called "unsuitable" if everyone is doing it?
- The merits of arguing that "the customer knows more than the broker"
- Defending employee stock option cases - the aftermath of the tech wreck
- Industry standards from the tech wreck - broker responsibilities and preempting claims
2:30 The Use and Misuse of Mediation in Defending Customer Claims
E. Scott Douglas
Principal, Douglas Mediation (Manhattan Beach, CA)
David A. Picon
Partner, Proskauer Rose LLP (New York, NY)
David E. Robbins
Partner, Kaufmann, Feiner, Yamin, Gildin & Robbins LLP (New York, NY)
- Why and when you should you choose mediation
- Mediator selection: what qualities and skills you should look for
- Balancing advocacy with conciliation
- The mediation as a trial tactic - is it ever ethical?
3:30 Refreshment Break
3:45 Working Hand In Hand with Insurance Companies in Securities Arbitrations
David Benfield
Claims Counsel, Hartford Financial Products (Boston, MA)
David Jarvis
Senior Vice President, Senior Litigation Counsel
Wachovia Securities, LLC (Richmond, VA)
Jonathan S. Weber
Financial Institution Claims, AIG Inc. (New York, NY)
Luigi Spadafora (moderator)
Partner, Winget, Spadafora & Schwartzberg LLP (New York, NY)
- How should firms interact with their insurers?
- Who controls the defense?
- Insurance company methods of litigating arbitration cases when they also control the concurrent litigation
- Minimizing conflicts of interest between the broker-dealer, in-house counsel, and the insurer
- Centralizing the legal function as a strategy decision
4:45 Making the Case Against Research Fraud & Other Conflict of Interest
Claims
Andrew Weinberg
Director & Counsel, Director of Retail Ligation
Credit Suisse First Boston, L.L.C. (New York, NY)
James D. Yellen
Executive Director, Legal Division
Morgan Stanley (New York, NY)
Jonathan C. Uretsky
Partner, Phillipson & Uretsky, LLP (New York, NY)
Brad Kaufman (moderator)
Partner, Greenberg Traurig PA (West Palm Beach, FL)
- Initial steps to take when allegations of research fraud are made
- Defining a "customer" according to the NASD and NYSE
- Research and investment bank IPO spinning
- how to recognize it
- how to curtail it
- how to defend it
- Defenses to failure to disclose claims
- How to approach alleged conflicts of interest cases
- Going beyond "Chinese walls" – how to avoid conflicts
- Wire-house liability for analysts' reports spreading to other wire-houses
5:45 Conference Adjourns For The Day
Wednesday, May 25, 2005
8:00 Co-Chairs' Recap And Introduction to Day Two
8:10 Selecting an Effective Arbitration Panel for Broker/Dealer Claims
Kenneth E. Meister
Senior Vice President and Deputy General Counsel
Prudential Equity Group, LLC (New York, NY)
Erik Aschenbrenner
Managing Director, The Response Companies (New York, NY)
Robert S. Clemente
Counsel, Liddle & Robinson L.L.P. (Former Director
of Arbitration, NYSE) (New York, NY)
- Ranking and selection - what kind of due diligence should be performed?
- biography - arbitrator disclosure reports
- of what value are past decisions?
- Selection processes for each forum
- Conducting voir dire of arbitrators
- How to determine arbitrators' prejudices and predilections
- The benefit of obtaining arbitrators by agreement
- Defense's role in initiating new selection processes
- When is no panel the right panel?
9:10 Avoiding Liability on Clearing Claims
Jonathan Kord Lagemann
Law Offices of Jonathan Lagemann (Boston, MA)
Henry Minnerop
Partner, Sidley Austin Brown & Wood LLP (New York, NY)
This session will discuss the various duties and responsibilities of clearing firms to customers of their introducing brokers, and will cover the newest cases and claims, SRO enforcement, and defense tactics specific to clearing disputes.
- Approaches to disputes involving multiple defendants
- Clearing broker vs. retail broker: who has the customer agreed to arbitrate their claims with this?
- Clearing firm liability vs. servicing firm liability
- The latest on prime expert brokerage firm liability
- When to get a clearing expert
10:10 Coffee Break
10:20 Discovery: Avoiding Fines, Meeting Deadlines and Minimizing Costs
Thomas E. Hommel
Managing Director and Co-Head, Litigation
Lehman Brothers, Inc. (New York, NY)
David Jarvis
Senior Vice President, Senior Litigation Counsel
Wachovia Securities, LLC (Richmond, VA)
Stephen Younger
Partner, Patterson, Belknap, Webb & Tyler LLP (New York, NY)
- Complying with the NASD 99-90 discovery guidelines
- avoiding sanctions
- balancing the imbalance in obligations and time periods
- How aggressive are arbitrators being regarding voluntary disclosure
- what must be disclosed and what can be held back
- how the NASD has been ruling on voluntary disclosure issues
- when to consider the use of proactive discovery
- Minimizing costs and risks of electronic discovery
- cataloguing electronic documents
- addressing email and privacy concerns
- Zubulake methods and strategies to enable efficient document retrieval
- recovering discovery costs
- data processing tools
- Requirements to turn over documents and violations of NASD 8210
- Methods to streamline the discovery process
- Forensic analysis - what data is crucial to prove or disprove a case
- Avoiding obstruction of discovery by the claimant's side
- Addressing the spoliation argument
11:20 Applying the Uniform Securities Act to Pre-Dispute Arbitration Agreements
Daniel J. Donovan
Partner, Donovan & Rainie LLC (Baltimore, MD)
(Former Legal Counsel, Deutsche Bank)
Jonathan Kord Lagemann
Law Offices of Jonathan Lagemann (Boston, MA)
- When to apply anti-waiver provisions of the Uniform Securities Act
- Utilizing choice of law provisions in customer and arbitration agreements
- Ensuring compliance with state regulatory authorities
- What are the customer rights?
- SEC positions
- SRO positions
12:00 Winning Over the Arbitrators: Strategies for Defense Counsel Before and During Arbitration Hearings
John Bevilacqua
Litigation Department, Merrill Lynch, Pierce, Fenner & Smith Inc. (New York, NY)
Deborah G. Heilizer
Director and Counsel
Deutsche Bank Alex. Brown (a division of Deutsche Bank Securities Inc.) (Baltimore, MD)
Pete S. Michaels
Partner, Michaels & Ward LLP (Boston, MA)
Bill Singer (moderator)
Publisher of RRBDLAW.com
Partner, Gusrae, Kaplan, Bruno & Nusbaum, PLLC (New York, NY)
- Standards for motions to vacate and for dismissal
- Timing issues: methods for meeting key deadlines and milestones
- Tips and tactics for efficient investigation processes
- Venue:
- does it make a difference?
- when will the NYSE intervene?
- Presenting to NYSE vs. NASD arbitrators - important differences
- Who should arbitrate the case: in-house counsel vs. outside counsel
- Strategies for keeping costs down
- how the Rapoport case has affected arbitration costs
- Arbitration hearing skills for:
- opening and closing statements
- cross-examination
- methods of examining brokers and branch managers
- How to deal with the runaway, obnoxious or rude arbitrator
- Economic methodologies - ways to maintain efficiency
- Practical strategies for reducing arbitration awards
- methods for calculating damages
- the impact of the Waddell case on damages in securities arbitrations
- the effect of the Supreme Court's stance on proportionality
- effective presentation of a mitigation theory
- punitive damages in securities arbitrations - where the industry is
headed
- punitive damages as a negotiation tactic
- using profit and loss witnesses to help mitigate damages
- Attorney's fees in arbitration: under what circumstances?
- The courts' increasing role in appeals of arbitration awards - upsides and downsides
1:00 Networking Luncheon
2:00 Using Expert Witnesses To Win Over the Arbitrators
Erik Aschenbrenner
Managing Director, The Response Companies (New York, NY)
Henry R. Ferguson
President, Founding Partner
Ferguson, Pollack, Kern Consulting LLC (Ridgewood, NJ)
Jonathan C. Uretsky
Partner, Phillipson & Uretsky, LLP (New York, NY)
Daniel J. Donovan (moderator)
Partner, Donovan & Rainie, LLC (Baltimore, MD)
(former Legal Counsel, Deutsche Bank)
- When to bring in outside experts
- use in areas outside the norm
- when not to use an expert
- what type of expert to use
- Defining the role of the expert in your case
- best practices for presenting evidence and expert testimony at a
hearing
- Where to find superior and reputable experts
- What to look for in experts on suitability
- Why profit and loss experts are important for damages issues
- Using an expert to address loss mitigation
- Cross examining the other party's expert
3:00 Minimizing the Impact of Unfavorable Decisions On The Firm's Reputation,
Practices, Profits and Personnel
Daniel Taub
Senior Managing Director and Head of Litigation
Bear, Stearns & Co. Inc. (New York, NY)
Bill Singer
Partner, Gusrae, Kaplan & Bruno, PLLC (New York, NY)
- Avoiding enforcement action post-decision
- Responding to post-arbitration enforcement inquiries
- amending U-4s
- written responses
- on-the-record responses
- How to keep RR actions from spilling over into firm culpability
- How to discipline and when to fire RRs
- What minimum standards are other broker-dealers instituting for their brokers to help keep their records clean?
- "Damage control" when evidence is revealed of a systemic problem
- Using the press to spin the story
- Keeping information confidential: what and how
- Maintaining insurance coverage at close to current rates
- The NASD U-4 Expungement rule:
- how has it played out the past year?
- the economic burden of expungement on the RR/BD
- the role of the NASD Ombudsman
- removing expungements as a negotiation tactic and for disclosure
- does this change the dynamics of the arbitration system?
3:45 Coffee Break
4:00 Conducting Arbitrations in the Midst of Litigation or Government Investigation
Ernie Badway
Partner, Saiber Schlesinger Satz & Goldstein LLC (Newark, NJ)
David Gourevitch
Principal, Law Offices of David U. Gourevitch P.C. (New York, NY)
- Representing brokers with problematic pasts
- Costs and benefits of invoking the Fifth Amendment
- Pros and cons of staying discovery during an investigation
- Using parallel proceedings to obtain more discovery
- How to deal with various investigations and consent agreements from State AG criminal proceedings
- The interplay between class actions and arbitrations
- opting out to present the case to arbitration
4:45 Maintaining Ethical Standards in Securities Arbitrations
Aegis Frumento
Partner, Duane Morris LLP (New York, NY)
Faun Phillipson
Partner, Phillipson & Uretsky, LLP (New York, NY)
Stephen L. Ratner
Partner, Proskauer Rose LLP (New York, NY)
This interactive session will feature a variety of hypothetical situations posited by the panelists to those in attendance. With a dynamic give and take, you will learn how to handle a wide range of ethical issues and gray-area topics that you need to consider in the world of customer claims against Broker/Dealers.
- Understanding your role and your client
- in-house counsel vs. outside counsel
- defining your client
- Representing the broker-dealer directly
- disclosing conflicts to registered representatives
- written conflicts disclosure
- Representing the registered representative
- are you prepared to lose your job?
- when to call a prosecutor
- The ethics of confidentiality agreements
- Privacy law-sharing client information once a broker leaves a firm
- When should in-house counsel advise a broker to get outside counsel?
- What are the plaintiff's disclosure obligations?
5:45 End of Conference
Conference Details