Accounting Firms

The Financial Industry Regulatory authority has broadened its list of public arbitrators to preside over cases. The self-regulatory organization will provide dispute participants with the names of 15 public arbitrators, instead of 10, from which to choose. FINRA’s Board also modified its eligibility requirements for who can chair an arbitration panel.

FINRA allows plaintiffs and defendants of arbitration cases to choose three arbitrators.

In other FINRA arbitration news, the SRO is asking the U.S. Securities and Exchange Commission to approve a proposed rule change that would allow monetary awards mandating that parties pay one another damages to be offset. This rule change is for situations in which an arbitration panel awards damages to both the respondent and claimant and one party can’t or doesn’t pay what it owes.

If approved, the rule would allow the party that owes more money to only have to pay the net difference. If arbitrators don’t mean for an award to be offset when both parties owe one another money, they must state so in the award notice.

The accounting firm of Doeren Mayhew & Company was named in a lawsuit filed in Oakland County, Michigan, in connection with a highly publicized multi-million dollar alleged ponzi scheme using partnerships, many purported to earn revenues from telephone usage in Las Vegas hotels. The central figure reported as the mastermind of such investments is Ed May who, along with other individuals and firms, is the subject of several investigations including by the U.S. Securities and Exchange Commission.

The lawsuit was filed on behalf of investors jointly by three law firms: Sheldon Miller & Associates, a premier Detroit area litigation firm, the Poppe Law Firm, which has extensive experience in accounting malpractice claims, and Shepherd Smith Edwards & Kantas LTD LLP, a securities law firm which handles claims for investors nationwide.

The suit states allegations regarding Doeren Mayhew, including that the accounting firm was listed as the accounting firm of record for various partnership investments and that the firm and that some of its agents and directors were involved with the ongoing business affairs of the partnerships and/or engaged into direct and indirect communications with investors which misled them regarding these investments.

Articles Posted in Accounting Firms

FINRA Approves Wider Public Arbitrator List, Proposes Rule Change, and is Accused by Lawmakers of Not Doing Enough to Protect Investors From Bad Advisers

Detroit Accounting Firm Named in Lawsuit Involving Alleged Ponzi Scheme