nature of the dispute customers vs. member …...mickelsen did not act so as to minimize the risks...

AWARD FINRA Dispute Resolution

In the IVIatter of the Arbitration Between:

Names of Claimants

Friedel Lenz and Clara B. Lenz

VS.

Names of Respondents

Ausdal Financial Partners, Inc. and Kraig R. Mickelsen

Case Number: 12-03694 Hearing Site: Chicago, Illinois

NATURE OF THE DISPUTE

Customers vs. Member and Associated Person

The case proceeded under the Optional All Public Panel rule/ All Public Panel.

REPRESENTATION OF PARTIES

Friedel Lenz and Clara B. Lenz ("Claimants") were represented by Kalju Nekvasil, Esq., Goodman & Nekvasil, P.A., Clearwater, Florida.

Ausdal Financial Partners, Inc. ("Ausdal") was represented by Gara M. Seagraves, Esq., Baugh, Dalton, Carlson & Ryan LLC, Chicago, Illinois.

Kraig R. Mickelsen ("Mickelsen") was represented by Wendy S. Menghini, Esq., Greensfelder, HemkerS Gale, P.C., St. Louis, Missouri.

CASE INFORMATION

The Statement of Claim was filed on or about October 22, 2012. The Submission Agreement of Claimants was signed on or about October 11, 2012.

The Statement of Answer was filed jointly by Ausdal and Mickelsen on or about January 10, 2013. The Submission Agreement of Ausdal was signed on or about January 19, 2012. The Submission Agreement of Mickelsen was signed on or about January 9, 2013.

CASE SUMMARY

Claimants asserted the following causes of action: violations of federal securities laws;

FINRA Dispute Resolution Arbitration No. 12-03694 Award of 6

violation of Illinois securities law; violation of Illinois Consumer Fraud and Deceptive Business Practices Act; breach of contract; common law fraud; and breach of fiduciary duty. The causes of action related to the recommendation and purchase of Alpha Energy 2007-C, L.P., which investment Claimants alleged was unsuitable for Claimants' investment objectives.

Unless specifically admitted in their Answer, Ausdal and Mickelsen denied the allegations made in the Statement of Claim and asserted affirmative defenses.

RELIEF REQUESTED

Claimants requested an award in the amount of:

Actual/Compensatory Damages $110,000.00 Exemplary/Punitive Damages Unspecified Interest Unspecified Attorneys' Fees Unspecified Other Costs Unspecified Other Monetary Relief Unspecified

Ausdal and Mickelsen requested that the claims asserted against them be denied and dismissed in their entirety and that they be awarded their costs, fees, and sanctions.

OTHER ISSUES CONSIDERED & DECIDED

The Arbitrators acknowledge that they have each read the pleadings and other materials filed by the parties.

The parties advised that this matter settled on or about January 3, 2014. On or about January 13, 2014, Mickelsen requested that the panel consider his request for expungement.

Mickelsen submitted a Request for Expungement on or about February 27, 2014. The Panel conducted a recorded in-person hearing on Mickelsen's Request for Expungement on or about June 9, 2014. Neither Claimants nor Claimants' counsel appeared at the hearing nor contested Mickelsen's Request for Expungement.

The Arbitrators reviewed the settlement documents, considered the amounts paid to any party, and considered any other relevant terms and conditions of the settlement.

The Arbitrators reviewed Kraig R. Mickelsen's BrokerCheck Report® and considered whether a party conditioned a settlement of the arbitration upon agreement not to oppose the request for expungement.


The parties have agreed that the Award in this matter may be executed in counterpart copies or that a handwritten, signed Award may be entered.

AWARD

Upon Motion of Respondent Mickelsen for Entry of an Award, and without opposition thereto, and after considering the pleadings, the testimony, and the evidence presented at the hearing, the Panel grants the Motion and enters this Award granting the following relief:

1. ) Claimants' claims, each and all, having been settled and withdrawn, are hereby dismissed with prejudice;

2. ) The Panel recommends the expungement of all references to the above captioned arbitration from Respondent Kraig R. Mickelsen's registration records maintained by the Central Registration Depository ("CRD"), with the understanding that pursuant to Notice to Members 04-16, Respondent Kraig R. Mickelsen must obtain confirmation from a court of competent jurisdiction before the CRD will execute the expungement directive.

Unless specifically waived in writing by FINRA, parties seeking judicial confirmation of an arbitration award containing expungement relief must name FINRA as an additional party and serve FINRA with all appropriate documents.

Pursuant to Rule 12805 of the Code, the Panel has made the following Rule 2080 affirmative finding of fact:

The claim, allegation, or information is false.

The Panel has made the above Rule 2080 finding based on the following reasons:

This finding is based on the Panel's conclusion that Claimants' decision to make this investment was made with full disclosure of the risks, and Mr. Mickelsen was not responsible for the losses. Furthermore, Mr. Mickelsen did not act so as to minimize the risks of incurring losses.

The Panel reviewed the Expungement Exhibits 1-23, the Request for Expungement filed by Ms. Menghini, and listened to the testimony of Mr. Mickelsen, which included a discussion of the PPM and related documents. The Panel also questioned Mr. Mickelsen regarding this case, the investment, and Claimants.


The Panel considered the testimony of Kraig Mickelsen and the settlement agreement between Claimants and Respondents.

3. ) Other than Hearing Session Fees which are specified below, the parties shall each bear their own costs and expenses incurred in this matter; and

4. ) Any relief not specifically enumerated, including punitive damages,

sanctions, and attorneys' fees, is hereby dismissed with prejudice.

FEES

Pursuant to the Code, the following fees are assessed:

Filing Fees

FINRA Dispute Resolution assessed a filing fee* for each claim:

Initial Claim filing fee = $ 1,425.00

*The filing fee is made up of a non-refundable and a refundable portion.

Member Fees Member fees are assessed to each member firm that is a party in these proceedings or to the member firm that employed the associated person at the time of the events giving rise to the dispute. Accordingly, as a party, Ausdal Financial Partners, Inc. is assessed the following:

Member surcharge = $ 1,700.00 Pre-hearing process fee = $ 750.00 Hearing process fee = $ 2,750.00

Contested Motion for Issuance of a Subpoena Fees

Fees apply for each decision on a contested motion for the issuance of a subpoena.

One (1) Decision on a contested motion for the issuance of a subpoena One (1) arbitrator $200.00 (maximum of $600) = $ 200.00 Total Contested Motion for Issuance of a Subpoena Fees = $ 200.00

The Panel has assessed $100.00 of the contested motion for issuance of subpoenas fees jointly and severally to Friedel Lenz and Clara B. Lenz.


The Panel has assessed $100.00 of the contested motion for issuance of subpoenas fees jointly and severally to Ausdal Financial Partners, Inc. and Kraig R. Mickelsen.

Hearing Session Fees and Assessments

The Panel has assessed hearing session fees for each hearing session conducted. A session is any meeting between the parties and the arbitrators, including a pre-hearing conference with the arbitrators, that lasts four (4) hours or less. Fees associated with these proceedings are:

Four (4) Pre-hearing sessions with a single arbitrator x $450.00 = $ 1,800.00 Pre-hearing conferences: October 29, 2013 1 session

November 26, 2013 1 session December 6, 2013 1 session December 17, 2013 1 session

One (1) Pre-hearing session with Panel x $1,125.00 = $ 1,125.00 Pre-hearing conference: April 10, 2013 1 session

One (1) Hearing session on expungement x $1,125.00 = $ 1,125.00 Hearing Date: June 9. 2014 1 session Total Hearing Session Fees = $ 4,050.00

The Panel has assessed $1,462.50 of the hearing session fees jointly and severally to Friedel Lenz and Clara B. Lenz.

The Panel has assessed $1,125.00 of the hearing session fees on expungement to Kraig R. Mickelsen.

The Panel has assessed $1,462.50 of the hearing session fees jointly and severally to Ausdal Financial Partners, Inc. and Kraig R. Mickelsen.

All balances are payable to FINRA Dispute Resolution and are due upon receipt.


ARBITRATION PANEL

Philip J. Glick - Public Arbitrator, Presiding Chair Margaret Ann Angelucci - Public Arbitrator

Robert S. Sugarman - Public Arbitrator

I, the undersigned Arbitrator, do hereby affirm that I am the individual described herein and who executed this instrument which is my award.

Concurring Arbitrators' Signatures:

Isl Philip J. Glick 06/19/14 Philip J. Glick Signature Date Public Arbitrator, Presiding Chair

Isl Margaret Ann Angelucci 06/18/14 Margaret Ann Angelucci Signature Date Public Arbitrator

Isl Roberts. Sugarman 06/18/14 Robert S. Sugarman Signature Date Public Arbitrator

06/20/14 Date of Service (For FINRA office use only)

FINRA Dispute Rewiution Arbltratron No. Award P ^ j ^ 6 of 6

ARBfTRATION PANEL

Philip J . Glick - Public Arbitrator, Presiding Ciiair Margaret Ann Angelucci - Public Arbitrator

Robert 8, Sugannan - Public Arbitrator


Conajtdng Arbitrators' Signatures

P h i l f c J ( « S l K t k ^ - - ^ Signat PubliVArbitraior, Presiding Chair

lireDdte /

Margaret Ann Angelucci Signature Date Public Arbitrator

Robert S. Sugannan Signature Date Public Arbitrator

Date of Ser\/ice (For FINRA office use only)

FINRA Dispute Resolution Arbitration No. 12-03694 Award Page 6 of 6

ARBITRATION PANEL

Philip J . Glick - Public Arbitrator, Presiding Chair Margaret Ann Angelucci - Public Arbitrator



Concurring Arbitrators' Signatures:

Philip J . Glick Public Arbitrator, Presiding Chair

Margaret('^nn Angelu(< t̂i Public Arbitrator

Signature Date

Signature Date

Robert S. Sugarman Public Arbitrator

Signature Date

Date of Service (For FINRA office use only)

FiNRA Dispute Resolution Arbitration No. 12-03694 Award PagaSofS

Ph

I. the undersigned Arbltrl^tor and who executed this

Concurring Arbitrators'

Philip J . Glick Public Arbitrator, Presi i i ig Chair

Margaret Ann Angelucpi Put311c~?5)bitrator

tobert S. Sugarm Public Arbitrate

Date of Service (For FINRA office use only)

ARBITRATION PANEL

li 3 J . Glick " Public Arbitrator, Presiding Chair l\flargaret Ann Angelucci - Public Arbitrator


, do hereby affirm that I am the individual described herein ii^strument which is my award.

t ignatures:

Signature Date

Signature Date

Signature Date

nature of the dispute customers vs. member …...mickelsen did not act so as to minimize the risks...

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