Securities Fraud
Breach of Fiduciary Duty: unsuitability. We represented the beneficiaries of a Trust in which the broker, while exercising discretion over the account, mismanaged the Trust’s funds by leaving the investments primarily in equities. There was also a claim against the corporate trustee for failure to properly discharge its duties.
Outcome: The trustee settled prior to trial for a confidential amount. At trial, for the claims against the broker, the arbitration panel found in our clients’ favor and gave an award of more than $200,000.
Churning; unsuitability. An elderly widow lost a considerable portion of her life savings in a stock account handled by the broker on a discretionary basis. A Complaint was filed with the NASD, alleging churning in the account, unsuitability of the investments, and a failure of supervision by the broker-dealer.
Outcome: the case was settled, before trial, for over $100,000.
Fraud. A prominent Milwaukee broker persuaded various investors around the state to invest in two companies by misrepresenting the success and prospects of the companies. For example, with respect to a biotech company, he advised customers that he had inside knowledge that the company had developed a cure for AIDS. We commenced multiple actions, both in court and in arbitration. Because the broker was a major producer for the firm, and because a number of cases were involved, the broker-dealer defended vigorously.
Outcome: The broker was dismissed by the broker-dealer, and we recovered in excess of $500,000 for our clients, through settlements and arbitration awards.
Failure to diversify; unsuitability. Husband and wife relied on a broker who proceeded to over-concentrate their investments in the technology sector, including in unsuitably risky stocks. When the market for technology stocks declined, the couple lost considerable money which would not have been lost if the account had been properly managed. A Statement of Claims was filed with the NASD, an arbitration panel was appointed, and discovery (the exchange of documents) was conducted.
Outcome: Prior to trial, the case settled for over $97,000.
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