Altamirano PLLC Obtains FINRA Arbitration Award After Defeating Motion to Dismiss

Altamirano PLLC represented a Claimant in a FINRA arbitration against First Southern, LLC. The matter involved contested issues of liability, causation, and damages, and was litigated through a multi-day evidentiary hearing in San Juan, Puerto Rico.

The arbitration panel denied Respondent’s motion to dismiss both before the hearing and again after the conclusion of Claimant’s case-in-chief, allowing the case to proceed to a decision on the merits.

Following consideration of the pleadings, testimony, and documentary evidence, the panel issued an award in favor of the Claimant.

Procedural History and Motion Practice

The case presented a threshold issue that is common in complex FINRA arbitrations: whether a claim should be dismissed before a full evidentiary record is developed.

On January 28, 2026, Respondent filed a motion to dismiss pursuant to Rule 12504(a) of the FINRA Code of Arbitration Procedure. Claimant opposed the motion, and the panel heard oral argument on March 20, 2026. The panel denied the motion, permitting the case to proceed and allowing Respondent to renew its arguments following the conclusion of Claimant’s case-in-chief.

After Claimant presented his evidence at hearing, Respondent renewed its request for dismissal, this time under Rule 12504(b), arguing that Claimant failed to establish the required elements of liability, damages, and causation. Claimant opposed the motion, arguing that sufficient evidence had been presented to allow the matter to be decided on the full record.

The panel rejected Respondent’s arguments and again denied the motion.
As a result, the case proceeded through a full evidentiary hearing, after which the panel issued an award in favor of Claimant.

FINRA Arbitration Hearing and Award

The arbitration was heard over three days before an all-public panel in San Juan, Puerto Rico. Following full consideration of the testimony and evidence presented, the panel issued an award finding Respondent liable and awarding compensatory damages to the Claimant.

Although the panel did not award the full amount of damages sought, it rejected Respondent’s position that no liability existed and declined to grant any of Respondent’s requested relief, including its request for attorneys’ fees.

The panel also denied all remaining claims for relief not specifically addressed in the award, including requests for punitive damages and attorneys’ fees.

The panel allocated the majority of hearing session fees to Respondent.

Understanding FINRA Rule 12504 Motions to Dismiss

This case highlights an important procedural reality in FINRA arbitration. Motions to dismiss are strongly disfavored and are granted only in limited circumstances.

Under FINRA Rule 12504(a), motions to dismiss prior to the conclusion of a claimant’s case-in-chief may be granted only where:

• the claimant has previously released the claims in dispute;
• the respondent was not associated with the account, securities, or conduct at issue; or
• the dispute has already been fully and finally adjudicated.

These grounds are intentionally narrow. FINRA arbitration is designed to allow claims to be resolved on a developed factual record, not on early dispositive motions.

As a result, motions to dismiss under Rule 12504(a) are frequently denied unless they fall squarely within these categories. These limitations are significant in practice.

Respondent first sought dismissal prior to the hearing under Rule 12504(a). That motion was denied because the arguments raised, primarily relating to alleged deficiencies in liability, damages, and causation, did not fall within the narrow grounds for dismissal permitted under the rule.

Rule 12504(b), by contrast, permits a motion to dismiss after the conclusion of a claimant’s case-in-chief. At that stage, the panel evaluates whether the claimant has presented sufficient evidence to meet its burden of proof.

Respondent renewed its motion after the conclusion of Claimant’s case-in-chief under Rule 12504(b), arguing that Claimant failed to carry his burden of proof. The panel rejected those arguments and denied the motion.

The case therefore proceeded to a full hearing and ultimate decision on the merits.

Key Takeaways from the Award

This matter provides practical insights into how FINRA arbitration panels approach motion practice and damages in customer cases.

1. A Case May Survive Dispositive Motions Yet Still Present Complex Damages Issues

The denial of a motion to dismiss, whether under Rule 12504(a) or Rule 12504(b), means that a claimant has presented a legally viable claim supported by sufficient evidence to proceed. It does not, however, resolve the panel’s damages analysis or guarantee that the panel will award the full measure of damages sought.

Panels frequently distinguish between:

• whether a claim should be heard; and
• the extent to which a respondent is financially responsible for the claimed losses.

In cases involving contested causation or multiple potential sources of loss, panels may find liability while limiting damages to a portion of the claimed amount.

2. FINRA Panels Are Reluctant to Grant Dispositive Motions Under Rule 12504(a) in Fact-Intensive Cases

Where a case turns on disputed facts, FINRA panels generally prefer to hear the evidence before making a final determination.

This case reflects that principle. Respondent’s motion challenged Claimant’s ability to establish liability, damages, and causation. The panel rejected those arguments at the motion stage and allowed the case to proceed through a full evidentiary hearing.

3. Motion Practice Focuses the Issues the Panel Ultimately Decides

Motions to dismiss and arguments presented in support or in opposition sharpen the central issues in the case.

Those issues carried through to the panel’s ultimate determination on the merits.

In practice, this can result in awards that reflect a compromise between competing narratives of liability and damages.

4. Panels May Award Partial Damages in Complex Causation Cases

FINRA arbitration panels are not constrained to an all-or-nothing outcome. In cases where the panel finds misconduct but determines that the respondent is not fully responsible for the entirety of the claimed losses, the panel may award a reduced amount of compensatory damages.

This type of outcome, sometimes described as a “split” or partial award, reflects the panel’s effort to balance competing evidence regarding responsibility and loss.

5. Requests for Attorneys’ Fees Are Frequently Denied Absent a Clear Basis

In this case, both parties sought attorneys’ fees. The panel denied those requests.

FINRA panels often decline to award attorneys’ fees, even where a claimant prevails on liability.

Contact Altamirano PLLC for More Information About FINRA Arbitration

For more information regarding FINRA arbitration claims, or to speak with a FINRA arbitration lawyer, contact Altamirano PLLC at (212) 220-6556.