Broker-Dealer Litigation - Greenberg Traurig LLP

unavailable, Gizankis and FINRA agreed to settle the matter for a sanction less than a bar.
FINRA filed an assented-to motion to dismiss, arguing that Gizankis’s application for review
was mooted by the settlement. The Commission granted FINRA’s motion to dismiss.
In re Sweat, Release No. 65117, 2011 SEC LEXIS 2814 (Aug. 11, 2011).
Q.2.h
The Commission considered a motion for reconsideration by Intermountain Financial
Securities, Inc. (“IFS”), a FINRA member firm, and Sweat, a registered general securities
representative and IFSs’ President and CCO. The Applicants moved for reconsideration of an
order by the Commission dismissing their petition for review of a FINRA hearing panel decision.
The FINRA hearing panel had suspended Sweat from association and suspended IFS
from FINRA membership until they complied with requests for information that FINRA had
issued during a routine examination of IFS. Under the terms of the hearing panel’s order, if the
Applicants did not comply with the requests for information within three months, Sweat’s
suspension would automatically convert into a bar and IFS’s suspension would convert into an
expulsion. Applicants filed an appeal with the Commission and requested a stay of their
suspensions. The Commission denied Applicants’ stay request and issued a briefing order
setting a deadline for Applicants to submit a brief and noting that failure to file a brief could
result in dismissal pursuant to Rule of Practice 180(c). The Commission did not receive a brief
from Applicants and dismissed their appeal.
Applicants sought reconsideration claiming that their failure to file a brief was “due to
illness.” The Commission denied the request, noting that reconsideration is an extraordinary
remedy designed to correct manifest errors of law or fact, or to permit the presentation of newly
discovered evidence, and that Applicants’ motion failed to provide such grounds for
reconsideration.
In re Chen, Release No. 65345, 2011 SEC LEXIS 3224 (Sept. 16, 2011).
Q.2.h
The Commission considered an application for review by Chen, a former registered
representative of a FINRA member firm, of a FINRA decision. FINRA had barred Chen after
Chen failed to respond to letters FINRA sent him inquiring about his discharge from a FINRA
member firm, which the Firm had disclosed on Chen’s Form U-5. FINRA’s letters repeatedly
warned Chen that he would be suspended and automatically barred if he failed to respond to
FINRA’s inquiries. Chen apologized but did not dispute that he had notice of FINRA’s requests
and that he failed to respond, and his request for a hearing was also untimely. The Commission
granted FINRA’s motion to dismiss.
443