Federal Judge Confirms Firm’s $2.4M FINRA Arbitration Award for Katalyst Securities Against Marker Therapeutics
March 14, 2022
A federal judge in the Southern District of New York has confirmed a $2.4 million FINRA arbitration award secured by Harris St. Laurent & Wechsler LLP partner Adam Oppenheim on behalf of Katalyst Securities, a leading independent brokerage firm.
Katalyst had initially brought its FINRA action against Marker Therapeutics (NASDAQ: MRKR) alleging breach of contract and unjust enrichment arising from a successful private placement before Marker’s listing on NASDAQ in 2018. The result was a complete victory in September 2022. Katalyst recovered the total amount of its claims for cash damages, the value of warrants, and the full amount of Katalyst’s costs, including its legal fees.
After removing Katalyst’s petition to confirm the arbitral award to Federal Court, Marker sought vacatur of the award, challenging FINRA’s jurisdiction to arbitrate the dispute and the panel’s application of the law.
On March 9, 2022, Judge Laura T. Swain, Chief United States District Judge of the SDNY, plainly rejected all of Marker’s arguments and confirmed the underlying award. In her Order, Judge Swain found that the FINRA panel had jurisdiction over the dispute and held that the District Court could not second-guess the panel’s interpretation of a contract. Marker was ordered to pay approximately $120,000 in prejudgment interest.
In a Law360 article on the decision, Oppenheim noted that while the underlying contract dispute may have been ordinary, the case was noteworthy because his client gave him and his team the resources necessary to do their job without compromise.
“These cases settle—all the time—because people become convinced the game isn’t worth the candle,” Oppenheim told Law360. “Katalyst had the confidence and patience to let me fight until they got every penny they were entitled to. It was a privilege to be along for the ride.”
The case began in 2017 when Marker, immediately following a merger with TapImmune, Inc., appointed Peter Hoang as its new CEO and refused to honor the Placement Agency Agreement already in place with Katalyst. Under that agreement Marker was to pay Katalyst for any funds raised during a one-year “tail period” from investors to whom Katalyst had pitched—successfully or not—during its fundraising efforts in the previous year.
Although Hoang initially promised (on a recorded line) that Marker would make good on its obligation to pay Katalyst, he soon changed his mind, and Marker refused to pay. After failed efforts at mediation, Katalyst filed a FINRA arbitration which, after a five-day evidentiary hearing, resulted in a total victory.
Oppenheim was assisted in the representation by Harris St. Laurent & Wechsler associates Afrodite Fountas and Daniel Grossman.
The case is Katalyst Securities LLC v. Marker Therapeutics Inc., case number 1:21-cv-08005, in the U.S. District Court for the Southern District of New York.