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Federman & Sherwood Defeats an Arbitration Clause Sought to be Enforced by Royal Alliance Associates, Inc.

Oklahoma City, Oklahoma (March 4, 2019) — Federman & Sherwood, a law firm with offices in Oklahoma City, Oklahoma and Dallas, Texas is pleased to announce that it was able to recently defeat an arbitration clause sought to be enforced by Royal Alliance Associates, Inc. (“Royal Alliance”), and its agent Gordon Robinson. Royal Alliance is part of the Advisor Group and is a Delaware Corporation with its headquarters in New Jersey. Through its network of more than 7,000 affiliated advisors it provides operational support and technologies to support investment advisors. Gordon Robinson (“Robinson”) is an investment advisor and certified financial planner based in Tulsa, Oklahoma. Robinson sold a combination of investment products, including annuities and insurance products through the Royal Alliance Vision Advisor Account, to the plaintiff, who had just recently been widowed. After being sued Royal Alliance and Robinson sought to enforce an arbitration clause in the form agreement that Robinson had the widow sign. In applying state-law principles the Court found that Robinson had acknowledged that he owed a fiduciary duty to the widow and he had a duty to explain the terms of the contract. Since Robinson, Royal Alliance’s agent, was unable to distinguish the differences between arbitration and a court proceeding it was not credible that he had accurately and completely explained the differences to the widow so she could make an informed decision before signing the Royal Alliance documents. The Court also found that Robinson’s sales assistant’s testimony was “of little weight” after it was revealed that counsel for Royal Alliance and Robinson had provided her with a script for her testimony.

William B. Federman, founder and managing member of Federman & Sherwood said the firm was extremely gratified to have defeated the arbitration clause which will now allow the plaintiff to pursue her claims in court, instead of arbitration. “Denying a person’s right to court is un-American and contrary to our principles of justice. This is not a dispute between two conglomerates. This is a fight by a widow to recover money she lost through what we believe to be a wily investment advisor who was not adequately supervised. Arbitration robs an investor of their right to full discovery, including depositions, and prevents the entire story from being uncovered. It benefits the brokerage firms at the customer’s expense. We look forward to our client getting her day in court and having Royal Alliance face a trial in Oklahoma.”   For further information, see Johnson v. Gordon Robinson, Royal Alliance Associates, Inc., Investments by Design Group, Inc. and Investment Designers of Tulsa, Inc., filed in the District Court of Oklahoma County, State of Oklahoma, Case No. CJ-2017-4547.

William B. Federman –  Federman & Sherwood – (405) 235-1560/Fax: (405) 239-2112 – Email to: wbf@federmanlaw.com

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