Problem
You are a lawyer representing FINRA member Freedom Investments in a case brought by a former client, Bruce Lee.
1. When Lee opened his account with Freedom, he signed an arbitration agreement in which he agreed to resolve all claims against Freedom Investments by filing a case in a court of competent jurisdiction.
2. The agreement also included prohibitions against Lee's (i) filing a class action and (ii) requesting punitive damages.
3. The client has filed a FINRA arbitration claim against the Firm and the registered representative who handled the accounts at Freedom, Betty Ting, alleging damages of $150,000 based on claims of unsuitability, churning, breach of fiduciary duty and failure to supervise.
Based on the details provided above, answer the following questions.
A. Freedom Investment's arbitration agreement complies with FINRA rules. Do you agree or disagree? Please explain your answer.
B. Freedom Investments is free to file an action in court objecting to FINRA arbitration without running afoul of FINRA guidance.
• State whether you agree or disagree and explain your answer.
C. Discuss the primary difference between a motion to recuse and a challenge for cause against an arbitrator who decides the motion.
D. Which dispositive motion(s) should Freedom Investments consider filing prior to the hearing if any? Explain the reasons why you believe a particular motion should be made. If you do not believe any motions should be filed, explain why.