Supreme Court Case Filed Against Raymond James Financial Services, Inc. and John Dwight Wanken Broker-Dealer And Branch Manager Accused Of Fraud At FINRA Arbitration

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Landmark case presents the Supreme Court with the opportunity to resolve a circuit split and clarify what constitutes adequate judicial review of arbitration awards in cases involving genuine allegations that the award was fraudulently procured. The petition filed with the court involves a case that began in a FINRA arbitration claim against Raymond James Financial Services, Inc. and its branch manager, John Dwight Wanken. Millions bound by mandatory arbitration clauses could be affected by the Court’s decision to grant certiorari.

"Will the Court take this opportunity to clarify what constitutes adequate judicial review of arbitration awards involving genuine allegations the award was fraudulently procured?" Wanken asked

A petition for a writ of certiorari was filed with the Supreme Court of the United States on January 23, 2012 against Respondents Raymond James Financial Services, Inc. and its branch manager, John Dwight Wanken, seeking a review of a decision issued by the Fifth Circuit for the United States Court of Appeals regarding a motion for vacatur for fraudulent procurement of an arbitration award.

Among the questions presented by Petitioner Chris Wanken is whether the Court will resolve a split between the circuit courts regarding what type of judicial review the courts will have in review of arbitration awards involving genuine allegations of procurement by fraud.

The case began in federal district court when Chris Wanken filed a motion to vacate the arbitration award following an arbitration conducted by the Financial Industry Regulatory Authority (FINRA) in December 2009. At arbitration, the Respondents’ testimony matched perfectly. They corroborated each other’s testimonies completely, down to precise and specific details – though they had no evidence to substantiate either of their testimonies.

Shortly after the arbitration concluded, however, Petitioner has alleged that Raymond James’ branch manager offered testimony to the Internal Revenue Service (IRS) and Texas Workforce Commission (TWC) that wholly contradicted all material testimony he and Raymond James offered at FINRA arbitration. Petitioner argued this post-arbitration contradictory testimony and evidence would prove his allegations that the award was fraudulently procured by Respondents and pleaded with the lower courts to subpoena the evidence, but they refused to do so.

At district court, Chris Wanken alleged the Respondents conspired and colluded to perjure themselves in the FINRA arbitration, spoliated evidence by suppressing thousands of pages of discoverable documents, suborned perjury, obstructed justice, offered testimony they knew to be false and that this was part of a plan coordinated by the Respondents and their attorneys, constituting fraud upon the court.

Despite Wanken’s averment that there were unresolved issues of material fact and unreviewed TWC and IRS evidence that would support his allegations that Respondents committed fraud at arbitration to procure a favorable award, the district court confirmed the award through a sua sponte conversion to summary judgment in February 2011. The Fifth Circuit affirmed the lower court’s holding in its September 2011 order, despite the unreviewed evidence and unresolved issues of fact regarding allegations Respondents committed fraud at FINRA arbitration.

“Not only did the Fifth Circuit affirm a lower court’s flawed order, it sight unseen accepted the Respondent’s assessment of what is in the unsubmitted and unreviewed evidence from the TWC and IRS. The Respondents are accused of committing fraud and perjury – and yet the lower courts have taken their word for what the unreviewed evidence contains. It’s absolutely shocking,” Wanken said.

The TWC and IRS evidence has never been submitted to or reviewed by any court, despite Wanken’s urging that it be subpoenaed by the district court. In his appeal to the Fifth Circuit, Wanken argued that the case had to be remanded to resolve the genuine issues of material fact regarding allegations that Respondents fraudulently procured the FINRA arbitration award, which could be answered through the production of the TWC and IRS evidence.

“No court can determine the contents of unsubmitted, unreviewed evidence based on one party’s assessment of the evidence. The evidence must at some point be reviewed by a court. It is disturbing that the Fifth Circuit ruled on the contents of evidence that neither it nor any court has ever reviewed. This is why I have asked the Supreme Court to exercise its supervisory powers over the Fifth Circuit given the panel’s unusual departure from normal judicial proceedings, evidenced in this ruling that contradicts statute, precedent, procedure and plain common sense,” commented Wanken.

Wanken also has presented a question to the Court involving a circuit split regarding the scope of judicial review of arbitration awards in which there are genuine allegations of fraudulent procurement. The Ninth and Sixth Circuits have held that the district courts must sufficiently resolve whether an award was fraudulently procured at arbitration. Yet the Fifth Circuit’s holding sets the precedent that confirmation of arbitration awards is paramount, regardless of if the award was fraudulently procured.

“Will the nation’s courts hastily confirm ill-gotten arbitration awards, regardless of if they are won by hook or by crook? Or will the Court take this opportunity to clarify what constitutes adequate judicial review of arbitration awards involving genuine allegations the award was fraudulently procured?” Wanken asked. “Given that there are binding arbitration clauses in virtually all consumer contracts and in many employment relationships, this is a significant issue that has widespread implications affecting millions of Americans.”

The Respondents are represented by four lawyers, including Brady Sparks, a sole practitioner, N. Henry Simpson, III of Busch Ruotolo & Simpson and Thomas Gregor and Linda Broocks of Ogden Gibson Broocks Longoria & Hall. Wanken is a pro se litigant and has represented himself before FINRA, the district court, the Fifth Circuit and now before the Supreme Court. The Respondents’ answers are due back to the Court by February 29, 2012.

“I am hopeful that the Court will grant certiorari and resolve these critical questions,” said Wanken. “I allege that Raymond James and John Dwight Wanken lied at the FINRA arbitration to win a favorable award. On a macro level, as a matter of public policy, it’s critical that the Supreme Court offer clarity on how courts should treat vacatur motions in which there are genuine allegations the award was procured by fraud. On a micro and very personal level, I look forward to this case being remanded so that the evidence can be obtained and reviewed. One of us is telling the truth in this case. Ultimately, a remand could ensure that the allegations of fraud are resolved and justice finally served.”

Supreme Court of the United States Case Number 11-939

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Chris Wanken
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