IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 18-50269

SAM BALABON; SPOT QUOTE HOLDINGS, INCORPORATED,

 Plaintiffs - Appellants

v.

RICHARD KETCHUM; ERIN VOCKE; FINANCIAL INDUSTRY 

REGULATORY AUTHORITY, INCORPORATED, 

 Defendants - Appellees

Appeal from the United States District Court

for the Western District of Texas

USDC No. 1:17-CV-486

Before OWEN, Chief Judge, and HAYNES and COSTA, Circuit Judges.

PER CURIAM:*

Sam Balabon owns two affiliated entities, Spot Quote Holdings, Inc. 

(Spot Holdings) and Spot Quote LLC (Spot). Spot is a broker-dealer subject to 

regulation by the Financial Industry Regulatory Authority (FINRA). Spot 

Holdings is not a FINRA member. FINRA is a registered national securities 

association and a self-regulatory organization under the Securities and 

 

* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not 

be published and is not precedent except under the limited circumstances set forth in 5TH 

CIR. R. 47.5.4.

United States Court of Appeals

Fifth Circuit

FILED

November 25, 2019

Lyle W. Cayce

Clerk

 Case: 18-50269 Document: 00515212473 Page: 1 Date Filed: 11/25/2019
No. 18-50269

2

Exchange Act of 1934, 15 U.S.C. § 78s(a), and the Maloney Act of 1938, id. § 

78o-3. Financial brokers and dealers must join FINRA, which has broad 

authority to regulate its members’ compliance with federal securities laws. Id.

§ 78o(a)(1), (b)(1); see Turbeville v. Fin. Indus. Regulatory Auth., 874 F.3d 1268, 

1270 (11th Cir. 2017).

In 2013, FINRA told Balabon that he could sell securities only through 

the regulated Spot. FINRA reminded Balabon of the order in June 2016. 

Balabon believed that the order was illegal and refused to comply. He then 

filed this pro se lawsuit in federal district court against FINRA and two of its 

employees. The complaint asserts two claims of tortious interference with the 

unregulated Spot Holdings’ business and a claim of unlawful discrimination 

based on fines FINRA imposed on Spot.

Defendants moved to dismiss for lack of subject matter jurisdiction, 

arguing that Plaintiffs failed to exhaust administrative remedies. Defendants

also moved to dismiss for failure to state a claim based on regulatory immunity. 

Plaintiffs did not address the exhaustion defense in their response to the 

motion to dismiss.

The magistrate judge to whom the case was referred determined that the

district court lacked jurisdiction. The court explained that the Securities

Exchange Act establishes an administrative process for challenging a FINRA 

decision. A member may appeal a FINRA enforcement action within the 

organization and, once final, to the Securities and Exchange Commission, 

FINRA’s supervising agency. 15 U.S.C. §§ 78s(d)(1), (2); see Scottsdale Capital 

Advisors Corp. v. Fin. Indus. Regulatory Auth., Inc., 844 F.3d 414, 417–18 (4th 

Cir. 2016). If the SEC rules against the member in a final order, then judicial 

review is in the court of appeals. 15 U.S.C. § 78y(a)(1). The magistrate 

concluded that this review scheme—administrative review followed by judicial 

review in the court of appeals—precludes challenging a FINRA order in district 

 Case: 18-50269 Document: 00515212473 Page: 2 Date Filed: 11/25/2019
No. 18-50269

3

court. See Scottsdale, 844 F.3d at 424; Santos-Buch v. Fin. Indus. Regulatory

Auth., Inc., 591 F. App’x 32, 33 (2d Cir. 2015) (per curiam); cf. Jarkesy v. S.E.C., 

803 F.3d 9, 12 (D.C. Cir. 2015). The district court adopted the magistrate 

judge’s recommendation and dismissed the lawsuit without prejudice.

Balabon appealed.1 But his opening brief does not challenge the district 

court’s ruling that it lacked subject matter jurisdiction. The closest Balabon 

comes is arguing that this case involves a “substantial constitutional issue.”

At first blush, that could be viewed as an argument for district court

jurisdiction. In limited circumstances, a plaintiff may avoid a scheme 

channeling review to an agency, followed by judicial review in the court of 

appeals, by bringing in district court a challenge that is wholly collateral to the 

 

1 Balabon, a nonlawyer, represented Spot Holdings and Spot in district court despite 

the need for a business to have counsel to litigate in federal court. See Rowland v. Cal. Men’s 

Colony, Unit II Men’s Advisory Council, 506 U.S. 194, 201–02 (1993) (“It has been the law for 

the better part of two centuries . . . that a corporation may appear in the federal courts only 

through licensed council.”). He also filed a notice of appeal on behalf of himself and his two 

companies. After this court informed Balabon that he could not represent Spot Holdings and 

Spot on appeal, he retained counsel for those entities. Counsel then filed a brief for those 

entities adopting Balabon’s pro se brief. Later on, Spot dismissed its appeal which is why 

this appeal just includes Balabon and Spot Holdings as appellants. We have not resolved

“whether the filing of the corporation’s notice of appeal by someone who is not an attorney is 

sufficient to deprive this Court of its jurisdiction to consider the appeal.” In re K.M.A., Inc., 

652 F.2d 398, 399 (5th Cir. Unit B July 1981) (per curiam); but see Insituto de Educacion 

Universal Corp. v. U.S. Dep’t of Educ., 209 F.3d 18, 22 (1st Cir. 2000) (“[A] corporate officer 

may sign and file a notice of appeal on behalf of the corporation, as long as the corporation 

then promptly retains counsel to . . . prosecute the appeal.”); In re Bigelow, 179 F.3d 1164, 

1165 (9th Cir. 1999) (same).

We again need not decide whether the filing of a business’s notice of appeal by a 

nonlawyer is a jurisdictional defect. Regardless of whether Spot and Spot Holdings filed a 

valid notice of appeal, Balabon did as in individual who can appear pro se. But in his brief, 

Balabon failed to challenge the district court’s exhaustion ruling, which it treated as a 

jurisdictional problem. Without us having to decide whether the failure to go through the 

FINRA administrative process is a jurisdictional problem, Balabon waived any challenge to 

the district court’s jurisdictional ruling by failing to brief it. We thus must affirm the district 

court’s dismissal for lack of jurisdiction and need not explore whether the problem with the 

business’s notice of appeal poses a separate ground for dismissing the case.

 Case: 18-50269 Document: 00515212473 Page: 3 Date Filed: 11/25/2019
No. 18-50269

4

agency’s action and outside its expertise. See Thunder Basin Coal Co. v. Reich, 

510 U.S. 200, 212–13 (1994). But even a liberal construction of Balabon’s brief 

confirms that his constitutional argument relates to regulatory immunity,2 not 

subject matter jurisdiction. This section of Balabon’s brief contends, for 

example, that “[b]ased on the Eleventh Amendment, FINRA is not a state or 

governmental agency, and therefore does not enjoy the protection of sovereign 

immunity.”

Although pro se, Balabon is still required to brief an issue in order to 

preserve it for appellate review. Davison v. Huntington Ingalls, Inc., 712 F.3d 

884, 885 (5th Cir. 2013). Because Balabon failed to address the jurisdictional 

ground on which his case was dismissed, he has abandoned his appeal. United 

States v. Arledge, 873 F.3d 471, 472–73 (5th Cir. 2017). 

The judgment is AFFIRMED. 

 

2 For the first time on appeal, Balabon argues that FINRA denied him “fair 

administrative process.” He failed, however, to raise any due process challenge in the district 

court. It is therefore forfeited. Sindhi v. Raina, 905 F.3d 327, 333 (5th Cir. 2018). Balabon’s 

mention of exhaustion for the first time in his reply brief is also too late to preserve the issue. 

United States v. Reed, 908 F.3d 102, 123 n.81 (5th Cir. 2018). 

 Case: 18-50269 Document: 00515212473 Page: 4 Date Filed: 11/25/2019