Opinion ID: 187214
Heading Depth: 2
Heading Rank: 2

Heading: Karsner

Text: Karsner, a mutual fund broker-dealer registered with FINRA and the Maryland Securities Division, was employed by Legacy Financial Services, Inc. (Legacy) in Gambrills, Maryland. [3] On October 19, 2004, Pamela Lothian, one of Karsner's mutual fund customers, began a FINRA arbitration proceeding against Karsner and Legacy by complaining that Karsner had induced her to invest in unsuitable investments and had negligently managed her account resulting in losses of approximately $104,638. Before the arbitration hearing, Lothian settled her claims against Karsner and Legacy. Pursuant to the settlement agreement, Lothian received $47,000 in exchange for abandoning her claims and stipulating to the expungement of all references to the dispute from Karsner's CRD record. On February 14, 2006, the arbitration panel approved the stipulated award, dismissed with prejudice Lothian's claims against Karsner and Legacy and recommend[ed] the expungement of all reference to the ... arbitration from Respondent Karsner's registration record maintained by the NASD Central Registration Depository. Pet. to Confirm Arbitration Award, Ex. 1. Karsner filed a petition to confirm the Stipulated Award in the district court on February 12, 2007, naming Lothian and NASD as respondents. Id. ¶ 14. NASD notified NASAA of the filing and NASAA in turn notified Commissioner Lubin. On March 20, 2007, the Commissioner moved to intervene pursuant to Federal Rule of Civil Procedure 24(a)(2) in order to oppose the expungement of Karsner's CRD record. [4] The district court denied the motion to intervene by minute order on April 9, 2007. Two days later, the district court granted Karsner's petition to confirm the Stipulated Award. Karsner v. Lothian, No. 07cv334 (D.D.C. Apr. 11, 2007). The Commissioner then filed a motion to reconsider the district court's denial of intervention, which was denied by minute order on April 27, 2007. Karsner v. Lothian, No. 07cv334, 2007 WL 4459698 (D.D.C. Apr. 27, 2007). On May 3, 2007, the Commissioner filed a timely notice of appeal of the denial of intervention and simultaneously moved to stay the expungement of Karsner's CRD record pending the appeal. The Commissioner did not, however, appeal the confirmation order. Although the district court initially denied the Commissioner's motion to stay, Karsner v. Lothian, No. 07cv334 (D.D.C. May 30, 2007), it subsequentlyagain by minute order stayed this case and eleven others in which Karsner seeks confirmation of arbitration awards recommending expungement. Karsner v. Lothian, No. 07cv344 (June 13, 2007).