finra award notice to kyle rote jr

8/3/2019 Finra Award Notice to Kyle Rote Jr.

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F INRA Dis pu te R e so lu tio nSou th ea st P ro ce ss in g Cen te rBoca Center Tow er 15 200 T ow n C enter C irc leBoca R aton, FL 33486EmaU:[email protected] ho ne ; 5 61 -4 16 -0 27 7Fax: 301 -527 4868

Fln~-" - . ., l d >umber of Pages in clu din g th e Co ve r She et:

Date: 02117 /2012

Case Number:0903437C ase N am e: W . K yle R ote, Jr. alk/a W illiam . K R ote, Jr., Mary L ynne R ote, e t al. v s. Mo rg an Keeg an &Company, Inc.To: Pete r J . Mou gey

From:P ho ne : 8 50 -4 35 -7 00 0 F ax : 8 50 -4 35 -7 02 0Bonnie Simon \ l . . A v \ IASen io r Case Admin is tr~o r

Message:

This facsimile transmission is intended only for the addresseets) shown above. It may contain Inforntutioll that is privileged,confidential, or otherwise protected frcm disclosure. Any review, djssemillstion or use of this transmission or its contents bypersons other than addressee is strictly prohlbited, If you have received tbis transmtssion In error, please notify ushwmedlately by telepbone ilt tb.~aJ)ove number.
mailto:EmaU:[email protected]:EmaU:[email protected]


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Fln~ F1nal1clal lndustry Regulatory AuthorItyN o . 2 4 0 0 P . 2

VIA FACSIM ILE AND MAILF ebru ary 1 7, 20 12Peter J. Mougey , Esq.L evin P ap an ton io T hom as M itch ell E ch sne r31e S. Baylen streetS uite 60 0P en sacola, F L 32502Subject: F IN RA D ispute R esolution A rbitration N um ber 09-03437W. K yle R ote , Jr. a/k/a William K . R ote , Jr., M ary Lynne R ote , et al. v s. M o rg anKeegan & C om pa ny, Inc.D ea r M r. M ou ge y;E nc lo se d p le as e find th e d ecis io n re ac he d b y th e a rb itra to r(s ) in th e a bo ve -re fe re nc ed m a tte r.

Responsibi l i ty to P ay M on eta ry A wardF IN RA rules pro vid e th at all m on etary a wa rds s hall be p aid w it hin 30 days of r ec eip t u n le s s am otion to vaca te h as be en file d w ith a court of com pe te nt ju ris diction . A n aw ard s hall b ea rin te res t from th e da te of th e a wa rd:

If not paid w ith in 30 days o f receipt; If t he award is the subject of a motion to vacate wh ich is denied ; or As specified by the panel in the award .

Inte res t shall be assessed at the legal rate, if any, then prevailing in the s tate w here the aw ardw as ren de red , o r a t a rate s et by the a rb itrato r(s ).

E xp ed ited S us pe ns ion P ro cee ding s for N on-P aym en t o f A wardsA rtic le VI, Section 3 of the FINRA By-Laws and FINRA Rule 9554 perm it F INRA to suspend orcance l the registration o f any firm or associated person that fa ils to com ply w ith a FIN RAa rb itr at io n awa rd .F irms are requ ired to notify F IN RA in w riting w ith in 30 days o f receipt o f an aw ard tha t they orthe ir associated persons have paid or o therw ise com plied w ith the aw ard , or to iden tify a va lidbas is fo r non-paym ent. W e also req ues t that p revailing cla im ants notify Us in w riting w hen the irawards have not been paid w ith in 30 days of rece ip t o f the award.W ritten n otification co nce min g a wa rd co mp lia nce o r lack th ere of s ho uld b e d ire cted to :I nvest or p ro te c ti on . Ma rke t i n1 ;e s ri ty . r.)i-;pute R~soilJ ti,)t\ Boca C ~nter Icwer 1 t 56.14.l1 .;0277

SO \ lt hea st Re !S ! on~1Offke S;(O() Town center Clrcle f !l01 5274863SlJitri 200 www;finra.org8 o c F . IR " t O I l. f L334S(i;J.015


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Dav id C are yF INRA D is pu te R e so lu tio nO ne Liberty P laza , 165 Broadw ay, 52nd F loorNew York, NY 100062 12 8 58 4 33 3 (te l) I 3 01 5 27 4 70 6 (fa x) I [email protected] (email)R igh t to F ile M otion to Vacate A ward

F IN RA rules p ro vide tha t, un les s th e ap plicable la w directs otherw ise , all a wards rend ered arefinal and are not subject to review or appea l. A ccordingly, F IN RA has no authority to vacate thisaward. Any party w ishing to challenge the aw ard must make a motion to vacate the award in afe de ra l o r s ta te c ou rt o f a pp ro pria te ju ris dic tio n p urs ua nt to th e F ed era l A rb itra tio n A ct, 9 U .S .C . 10, or a pplicab le s ta te s ta tute . T here are lim ite d grou nds for va ca tin g an arbitration aw ard , an d ap arty m us t b ring a m otio n to vacate w ith in the tim e p erio d s pecifie d by the a pplicab le s tatu te. Ifyou are not represented by counse l and w ish to challenge the award, w e urge you to seek legaladvice re gard ing any rights o r rem edies availa ble to you.

F orum F ee sYou w ill rece ive under separate cover an invo ice that reflects the fees assessed and anyouts tanding balance or re fund due. Fees are due and payable to FIN RA D ispute R esolutionupon receip t of the invoice and should be sent to the address specified on the invoice, Anyapp lica ble re fund s w ill a ls o be s ent un der se parate cover a ppro xim ately 45 d ays after th e ca secloses . A ll ques tions regarding paym ent offees and re funds should be directed to FIN RAF in an ce a t (2 40 ) 3 86 -5 91 0.

A rbit ra to r Eva lua tiopF INRA e nc ou ra ge s p artie s to complete Arbitrator Evaluation Forms at the conclusion of every .case . We will utilize your com ments in our ongo ing efforts to evaluate and im prove the serv icesour fo rum provides, You can com plete the Arbitra tor Evaluation Form on our w ebs ite atwww.f inra.org/arbevaluation.

P arty S ubm is sio ns to A rb itra tors A fter a C ase C los esFINRA rules provide that parties may not subm it documents to arbitra tors in cases that havebeen closed except under the fo llow ing lim ited circumstances : 1) as ordered by a court; 2 )at the request of any party w ith in 10 days o f service of an award, fo r typographical orcomputational errors, or m is takes in the description o f any person or property refe rred to inthe award ; or 3) if a ll parties agree and subm it documents w ith in 10 days of serv ice of anaw ard . Any docum ents , if subm itted, m ust be sent th rough FINRA.
mailto:[email protected]://www.finra.org/arbevaluation.http://www.finra.org/arbevaluation.mailto:[email protected]


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Q ue stio ns C on ce rn in g Awa rdShou ld you have any q ues tions, please contact m e at the phone num ber or em ail addressp ro vid ed be low . Parties sh ould no t directly contact arb itrato rs und er a ny circum stances .

V ery tru ly yo urs ,B on nie S im on INMBonnie R. SimonSenio r Ca se Adm in is tr ato rP ho ne : 5 61 -4 16 -0 02 77Fax; [email protected]

BRS:ndm:LC09Aidr: 09 /14 /2011Enclosure.RECIPIENTS:P eter J. M ougey, E sq ., William K yle R ate , Jr.Levin Papantonio Thom as M itche ll Echsner, 316 S. Saylen s treet, Su ite 600,P en sa co la , F L 3 25 02

P eter J, M ougey, Esq ., E .W . Jam ison Liv ing Trust dtd '3/28/92Levin Papantonio Thom as M itche ll Echsner, 316 S. Baylen Stree t, S uite 600,P en sa co la , F L 32502Peter J. M ougey, Esq ., M ary Lynne R oteLevin Papantonio Thom as M itchell Echsner, 316 S. Baylen S treet, Su ite 600,P en sa co la , F L 3 25 02G eorge S ulliva n, E sq ., M organ K eega n & C om pany, Inc.G reenberg Traurig , LLP, 200 Park Avenue, 38th F loor, New York, N Y 10166
mailto:[email protected]:[email protected]


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AwardF IN RA D is pu te R es olu tio n

In th e M atte r o f th e A rb itra tio n B etw ee n:ClaimantsW . K yle R ote , Jr. a lk/a W illiam K. Rote , J r.Mary Lynne R oteE .W . Jam is on L iv ing T rus t d td 3/28/92 cloKy le Ro te , Jr. TrusteeRespondentM organ Keegan & Com pany Inc.

C as e N um be r: 09-03437

Hea rin g S ite : M emph is , T en ne ss ee

N atu re o f the D is p ute : Cu stome r VS. Member .

REPRESEN TA TIO N O F PART IE SFor W. Kyle R ote , Jr. alkfa W illiam K . R ote , Jr., Mary Lynne Rote and E.W. JamisonL iv in g T ru st d td 3/28/92 c/o K yle R ote , Jr . T ru ste e, h ere in afte r c olle ctive ly re fe rre d to a s"C la imants ": P e te r J. M ougey, E sq ., Levin , P apanton io , T hom as , M itche ll, R affe rty &P roctor, P .A ., P ens aco la , F lorida and P age P oers chke. E sq ., H as ke ll S laughter Y ounga nd R e dik er, B irm in gh am , A la bama.F or M organ K eegan & C om pany lnc., here ina fter re ferred to as "R espondent": K athrynS . Gos tinger, Esq . and G eorge D. Sullivan, Esq ., G reenberg Traurig , LLP , A tlan ta ,Georgia.

CASE I NFORMAT IONS tatem ent o f C la im filed on or about: June 5, 2009.C la im ants s igned but d id not date the S ubm is sion A greem ent.S ta tem ent o f Answ er filed by Respondent on or about M arch 8, 2010.R es pondent s igned the S ubm is sion A greem ent: Ju ly 16, 200g.M otion in L im ine to E xclude R egula tory E vidence filed by R es pondent on or about:A ugust 23, 2011.O ppos ition to M otion in L im ine to ~xclude R egula tory E vidence filed by C la im ants on orabout: S eptem ber 6, 2011.M otion in L im ine to E xclude E vidence of Im proper D eriva tive C la im s filed byR espondent on or about: Augus t 23, 2011.O pposition to M otion in L im ine to E xclude E vidence of Im proper D eriva tive C la im s filedby C la im ant on or about S ,eptem ber 6, 2011.

CASE SUMMARYC la im ants asserted the fo llow ing causes of action : 1) breach of fiduciary duty; 2), vio la tion of F IN RA and N YSE R ules , breach of contract and negligence; 3) fraud; and,4) v io la tion of the T ennes see S ecurities A ct o f 1980 and the T ennes see C ons um er


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P rotection A ct o f 1977. T he caus es of action re la te to R es pondent's a lleged fa ilu re tod is clos e the nature and extent o f the risk involved in inves ting in certa in bond funds ,inc lud ing but not lim ited to , the R egions M organ K eegan S elect In term edia te B ond F undand the R egions M organ K eegan H igh Incom e F und in C la im ants ' accounts .U nle ss s pec if ic ally a dm itte d in its A ns we r, R es pon de nt d enie d th e a lle ga tio ns m ad e in th eS ta temen t o f C la im a nd a ss erte d va rio us a ffirm a tive d efe ns es .

REL IEF REQUESTEDIn the S ta tem ent o f C la im , C laim ants req ues ted com pens atory dam ages in the am ounto f $954,000.00, dam ages purs uant to T.e.A. 47 -18~109(a) , in te re s t, co s ts , a tto rneys 'fees , pun itive dam ages , and s uch other re lie f as th is P anel deem ed jus t and equ itab le .In the S ta tem ent of A ns wer, R es pondent req ues ted that the P anel d is miss C la im ants 'c la im , costs , F IN RA fees , atto rneys ' fees , expert w itnes s fees, and s uch other furtherand general re lie f to w hich th is P anel deem ed it ma y b e e ntitle d.A t the close of the hearing, R espondent reques ted that th is m atter be expunged fromth e C entra l R eg is tra tio n D ep os ito ry (the "C RD ") re co rd o f n on -p arty b ro ke r D on aldHowdeshe ll C 'Howdeshe ll" ).

O TH ER IS SU ES CONSID ER ED A N D D EC ID EDT he P anel acknow ledges that they have each read the p lead ings and other m ateria lsfile d b y th e p artie s.O n or about Augus t 25, 2011. R espondent filed a M otion in L im ine to ExcludeR eg ula tory E vid en ce a ss ertin g, a mon g o th er th in gs , th at C la im an ts s ho uld b e p re clu de dfro m p re se ntin g irre le va nt e vid en ce a t th e fin al h ea rin g re la ted to ce rta in reg ula to rym atters . O n or about S eptem ber 6, 2011, C la im ants filed the ir res pons e in O pposition toR es pondent's M otion in L im ine to E xclude R egula tory E vidence and ass erted, am ongo th er th in gs , th at th e d ocumen ts in q ue stio n a re p re sump tive ly d is co ve rab le p ub liclyava ilab le docum ents . O n or about Septem ber 12, 2011, the Panel issued an O rder thatd en ie d R es po nd en t's M otio n in L im in e to E xclu de R eg ula tory E vide nc e.O n or about August 25, 2011, R espondent f iled a M otion in L im ine to Exclude Evidenceo f Im pro pe r D eriva tive C la im s a ss ertin g, a mo ng o th er th in gs , th at C la im an ts ' fu ndm isman ag em en t a lleg atio ns co ns titu te s hare hold er d eriva tive cla im s a nd a ny evide nc ere la ted to such cla im s shou ld be barred from th is proceed ing under F IN RA R ule 12205.O n or about S eptem ber 6, 2011, C la im ants filed the ir O pposition to R es pondent'sM otion in L im ine to E xclude E vidence of Im proper D eriva tive C la im s ass erting , am ongother things, th at R es po nd en t's leg al a rg um en t is p re mis ed o n a fa ls e c ha ra cte riz atio nof the cla im in th is case. The Panel reques ted add itiona l brie fing on the m otion from theparties and deferred ru ling on the m otion . S ubs equently, a t the conclus ion of thehearings , the P anel denied R es pondent's M otion in L im ine to E xclude E vidence ofImp ro pe r De riv ativ e C la im s .


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In connection w ith R espondent's request that this m atter be expunged from the CRDrecord of non-party broker H ow deshell, the parties agreed that non-party brokerH ow des hell w as not involved in the alleged inves tm ent re lated s ales practice vio la tion.The parties have agreed that the Aw ard in th is m atter m ay be executed in counterpartcopies or that a handw ritten, signed A ward m ay be entered.

AWARDAfter cons idering the pleadings, the tes tim ony and evidence presented at the m-person,recorded hearing, the P anel has decided in full and fina l resolution of the issuess ubmitte d for d ete rm in atio n as fo llo ws :Respondent is found liab le and shall pay to C la im ants com pensatory dam ages in theam ount of $400,000.00, p re -ju dgme nt in te re st s pe cif ic ally e xc lu de d.E ach party is res pons ible for the ir res pective attorneys ' fees .The P anel recommends the expungem ent of a ll re ferences to the above captionedarb itration from non-party H ow deshell's regis tra tion records m ainta ined by the CRD .w ith the understanding that pursuant to N otice to M em bers 04-16, non-partyHow deshell m ust obta in confirm ation from a court of com petent jurisdiction before theCRD w ill execute the expungem ent d irective.U nles s s pecifically w aived in w riting by FINRA, pa rtie s s ee kin g jud ic ia l c on firm atio n o fan arb itra tion aw ard conta ining expungem ent relie f m us t nam e FINRA a s a n a dd itio na lparty and serve F IN RA w ith all appropriate docum ents.P ursuant to R ule 12805 of the C ode of Arb itra tion P rocedure (the "C ode"), thearb itra tion panel has m ade the follow ing R ule 2080 a ffirm ativ e fin din g o f faot:The registered pers on w as not involved in the alleged inves tm ent-rela ted s ales practicev iola tio n, fo rg ery , th eft, m is ap pro pria tio n o r c on ve rs io n o f fu nd s.The arb itra tion panel has m ade the above Rule 2080 f ind ing bas ed on the fo llow ingreasons:After hearing all of the tes tim ony and evidence presented by the parties at the fina lhearing, the Panel finds that there w as no evidence presented by C la im ants that non-party broker H ow des hell w as involved in any alleged Inves tm ent-re la ted sales practicevio la tion. C la im ants m ade the decis ion to purchase the securities in question on theirown and m erely placed the order w ith M r. HOW deshell. Therefore, the Panel is inagreement that expungement is a pp ro pria te in this case. .A ny and all cla im s for relie f not s pecifically addres sed here in, includ ing C la im ants 'requests for punitive dam ages and dam ages pursuant to T.C .A. 4 7-1 8-1 09 (a ), a redenied.


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P ursua nt to the C ode , th e fo llow in g fees a re a ssess ed:Filing FeesF IN RA D isp ute R esolutio n as sesse d a filing fe e* for e ach claim:In itia l c la im f ilin g f ee*The filing fee is m ade up of a non -re fu nd ab le and a r efundab le por tion .

N o , 2 4 0 0 p , 8

; : :$1,575.00

Member FeesM em ber fees are assessed to each m em ber firm that is a pa rty in th ese proce edings orto the m em ber firm (s) that em ployed the associated person(s) at the tim e of the even t(s )g iv ing rise to the d ispute. A ccord ing ly, R espondent is a party and a m em ber f irm.Member s u rc ha rgeP re -h ea rin g p ro ce ss fe eH ea rin g p ro ce ss fe e

= $2,250,00= $ 750.00= $4,000,00

Hearing Session Fees and AssessmentsThe Panel has assessed hearing sess ion fees for each sess ion conducted . A sess ion isa ny m ee tin g b etw ee n th e p artie s a nd th e a rb itra to rs , in clu din g a p re -h ea rin g co nfe re nc ew ith th e a rb itra to rs , .th at la sts fo ur (4 ) h ou rs or le ss , Fe es as sociated w ith thesep ro ce ed in gs a re :O ne (1 ) P re -h ea rin g s es sio n with th e P an el @ $1,200.00/5essionP re-hearing conference: M arch 9 , 2 010 1 sess ionE ig hte en (1 8) H ea rin g s es sio ns @ $1 ,200.00/sess ionHearing Dates : September 12, 2011 2 s ess ionsSeptember 13, 2011 3 sess ionsSeptember 14, 2 011 2 sess ionsSeptember 15, 2011 2 sess ionsJanuary 17 , 2012 2 sess ionsJanuary 18, 2012 2 s ess ionsJanuary 19, 2012 2 sess ionsFebruary 12.2012 3 sess ions

;;;$ 1.200.00

;; ;$21,600.00

To ta l H earing S ess ion Fe es : ; $22 ,600 .00The P anel has assessed $11,400.00 o f the hearing sess ion fees jo intly and severally toClaimants.The P anel has assessed $11,400.00 of the hearing sess ion fees to R espondent.A ll ba lances are payable to FINR A D ispute R esolu tion and are due upon rece ipt.


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ARBITRATION PANELJoel P. MellisRonald F. RosnerR andolph G uggenheim er, Jr.

Public Arbitrator, Presiding ChairpersonPub li c Arbi tr a to rNon -Public A rb itr ato rI, the unders igned A rbitra tor, do hereby affirm that I am th e in divid ua l d es crib ed he re inand w ho executed th is instrum ent w hich is my awa rd .Concurring Arbitrators' Signatures

lsI 2 /17 /12Joel P . Me llisPublic Arbitrator, Pres id ing Cha ir pe rson Signature Date

151 2 /17 /12R onald F. R osnerPub li c A rbi tr a to r S ig na tu re D ate

lsIRandolph Guggenheimer, Jr.Non-Public Arbitrator2 /17 /12Signature Date

2117112Date of Service (For FINRA Dispute Resolut ion use only)


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ARBITRAT ION eANSLJoe l P . Me llisRonald F . Ro snerRan do lp h Gug ge nh eime r, J r.

Public Arbitrator, Presiding ChairpersonF'UbIiC ArbitratorNon-Pub lic Arb it ra tor

I , th e unders ig ned Arbitrator, do hereby affirm that I am th e individual desc rib ed here inand who executed this instrument w hich is my award .Concurring Arbitrators' Signa.tures

P. Mellisic A rb it ra to r, P re sid in g Chair pe rson~ J J 7 l t : kSignature Date

Ronald F . Ros ne rPublic Arbitrator S ig na tu re Da te

Randolph Guggenhe ime r, J r.Non-Publ ic Arbitrator Signature Date

Da te o f Serv ic e (F or F INRA D is pu te Reso lu tio n u se o nly )


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ARB ITRATION PANELJoe l P . Me llisRonald F , RosnerRandolph Guggeohe ime r, J r~

N o . 2 4 0 0 P . 1 1

Public Arbitratorl Pres id ing Cha irpersonPublic ArbitratorNon-Publ i Arbit rator

II th e unders igned A rb itra to r, d o he reby a ff irm that I am the i nd iv idua l descr ibed hereina nd who e xe cu te d th is in strumen t which is m y award.Concurring Arbitrators' Signaturu

Joel P . MellisPublic Arbitrator, Presiding Chairperson

~R onald F. RosnerPublic Arbitrator

Randolph Guggenheimer, Jr.Non-Public Arbitrator

Date of Service (For FINRA Dispute Reso~ution use only)

Signature Date

Signature Date


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F e b . 1 7 . 2 0 1 2 1 2 : 1 7 P M N o . 2 4 0 0 P . 1 2FINRA Dispute ResolutionArbi tr at iOn No . 09 "( )3431Award eag,e 5 of 5

ARBITRATION PAMELJ oe l P . MellisRonald F. RosnerRan do lp h G ug ge nh eim er. Jr.

Public A rb it ra to r, P re s id in g Chair pe rs onPublic ArbitratorNon ..Public ArbitratorI. the unders igned Arb itr ato r, do hereby affirm th at I am th e In divid ual des crib ed her einand w ho execute d this Instrum en t w hich is my award.Coneurring Arbitrators' Signatures

Jo el P . M ellisPublic A rb itr at or, P re s id in g Chair pe rs on S ig na tu re Date

R onald F . R osnerPubl ic Arbit rator S ig na tu re Date

~. s._~~.Rand01Ph'Qgenheimer, Jr.Non-Pub lic A rb it ra to r

1. \ \ " 7 \ l 2 . .Signature Date

D ate of Service (For FIN RA D ispute R eso lution use only)

finra award notice to kyle rote jr

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