[T]he Panel decided: (1) to grant Respondent's motion to the extent of precluding the admission of evidence for the purpose of challenging the veracity of the SEC Order on Claimant's direct case, but would rule on the admissibility of evidence to rebut any defenses raised by Respondent, and; (2) to deny Respondent's motion to preclude the testimony of a witness, and rule on the admissibility of relevant evidence.

ARBITRATOR ANDERSON'S DISSENT 

The Panel erred in granting Respondent's motion to preclude the introduction of evidence challenging the veracity of the SEC Consent Order. The fact that Claimant was not allowed to present evidence to rebut the factual contentions of the Order prevented Claimant from making a full presentation of his case. There was a sufficient number of demonstrably false statements in the Consent Order to call into serious question the main contention of the Consent Order, that is, that Claimant Mittal was culpable in the manner described in the Order. Based on the evidence presented, the compensatory damages awarded under the breach of contract claim are inadequate. Furthermore, Claimant stated a valid claim for tortious interference with business relationship with regard to both AQR and other potential employers. Compensatory damages should have been awarded under that claim. In addition, ITG's willful and malicious conduct toward Mr. Mittal indicates that punitive damages in an amount at least equal to compensatory damages should have been awarded. 

MAJORITY ARBITRATORS' REPORT 

The following is but a brief response to the dissenting arbitrator's statement regarding the Panel's July 15, 2019 ruling on Respondent's motion to preclude. That ruling provided, in relevant part, that Claimant was precluded from challenging the veracity of the SEC Order on its direct case, but expressly provided that the Panel would rule on the admissibility of evidence offered to rebut the defenses asserted by the Respondent in connection with the Order. In fact, as the record in this case amply demonstrates, under the liberal application of this ruling at the hearing, Claimant was afforded a fair and full opportunity to present evidence in support of each of his claims and to rebut Respondent's defenses, including evidence challenging the factual underpinnings of the SEC Order - both on his direct case and on rebuttal. The intention and effect of the ruling was to limit the introduction of evidence regarding the SEC Order to the claims at issue in this arbitration, rather than conducting an unbridled re-evaluation by the Panel of the SEC's investigation into ITG and the ensuing Consent Order

Between February 2011 and April 2016, Levoff - the top corporate attorney at "Company-1," who also served as the company's assistant secretary and corporate secretary -allegedly misappropriated material, nonpublic information about Company-1's financial results and then executed trades involving the company's stock. This scheme to defraud Company-1 and its shareholders allowed Levoff to realize profits of approximately $227,000 on certain trades and to avoid losses of approximately $377,000 on others.

Levoff used his position as a member and co-chairman of Company-1's Disclosure Committee - which reviewed and discussed the company's draft quarterly and yearly earnings materials and periodic U.S. Securities and Exchange Commission (SEC) filings before they were disclosed to the public - to obtain material, nonpublic financial information about Company-1. Levoff used this confidential information to buy and sell stock in Company-1 ahead of its quarterly earnings announcements. When Levoff discovered that Company-1 had posted strong revenue and net profit for a given financial quarter, he purchased large quantities of stock, which he later sold for a profit once the market reacted to the news. When he learned that Company-1 had posted lower-than-anticipated revenue and net profit, he sold large quantities of Company-1 stock, avoiding significant losses.

Levoff was subject to Company-1's regular quarterly "blackout periods," which prohibited individuals who had access to material nonpublic information from engaging in trades until a certain period after the company disclosed its financial results to the public. Levoff ignored this restriction, as well as the company's broader Insider Trading Policy - which he was responsible for enforcing - and instead repeatedly executed trades based on material, nonpublic information without Company-1's knowledge or authorization. On several occasions, Levoff executed trades within a blackout period after notifying other individuals subject to the restriction that they were prohibited from buying or selling Company-1 stock until the blackout period terminated.

[L]ee was a Managing Director in the Firm's Private Banking and Investment Group. As a registered representative, Lee was required to personally complete his assigned Firm Element CE modules and other assigned training throughout the year by certain deadlines set by the Firm. For 29 CE modules assigned to him by the Firm during the Relevant Period, Lee instructed two members of his staff, a financial analyst and a client associate, to complete the CE modules on his behalf, rather than completing the modules himself. 

Specifically, Lee instructed his staff to complete the following seven Firm Element CE modules on his behalf: 2016 "Annual Compliance Discussion Video and Acknowledgment" module; 2016 and 2017 "Key Policy Review" modules; 2017 "Regulation GG: Unlawful Internet Gambling Enforcement Act" module; 2017 "Deceased Customer Notification" module; and 2016 and 2017 "Product and Sales Practices" modules. In addition, Lee instructed his staff to complete eight CE modules required by laws and regulations apart from FINRA Rule 1250(b). For example, these modules covered topics including: United States Federal Reserve Regulation W; the 2016 Fair Credit Reporting Act; financial crimes compliance; and the Department of Labor  Fiduciary Rule. In addition, Lee instructed his staff to complete 14 CE modules required by the Firm. These modules covered topics including: the Merrill Lynch Code of Conduct; market-linked investments; risk appetite; business continuity awareness; and information protection. 

At Lee's direction, these individuals ensured that the above-referenced training was completed on Lee's behalf, and Lee did not complete this training himself. As a result of the foregoing, Lee violated FINRA Rule 2010.