Legal Matters

An arbitration panel for the Financial Industry Regulatory Authority (“FINRA”) has made findings against Morgan Stanley Smith Barney, LLC and entered an award against the firm of over $500,000 in favor of a couple who filed claims against the firm alleging that Morgan Stanley sold them unsuitable investments. The couple alleged that their Morgan Stanley and its advisor, Timothy J. Prouty, made unsuitable investments, engaged in deceptive trade practices, breached their fiduciary duties, made negligent misrepresentations, breached their contracts with the claimants, and that Morgan Stanley failed to adequately supervise the broker. The claims were based on losses across eight accounts which suffered losses in junk bonds, ETFs that invested in derivatives and futures contracts, and option contracts. A panel of FINRA arbitrators found in favor of the couple and against Morgan Stanley, awarding $519,089 to compensate the couple for their losses, plus 8.75% in post-judgment interest. If you or someone you know lost money as a client of Timothy [...]

An arbitration panel for the Financial Industry Regulatory Authority (“FINRA”) has entered a $1.4 million award against Pershing, LLC for its role as a custodian and clearing firm in the R. Allen Stanford Ponzi Scheme, the second-largest investor fraud in US history. The claim was filed by a group of investors who invested in CDs issued by Mr. Stanford’s off-shore bank and claimed that Pershing “aided and abetted” Mr. Stanford by acting as his custodian and clearing fund and by wiring hundreds of millions of dollars to his bank in Antigua and other controlled accounts in the U.S., Canada, and Great Britain. The claimants alleged Pershing aided and abetted common law fraud, breached its fiduciary duties towards them, acted negligently, breached its contracts with the claimants, laundered money, employed manipulative, deceptive, and fraudulent devices in furtherance of the scheme, violated its duties of commercial honor and fair trade, negligently supervised Pershing employees, and engaged in a civil conspiracy to defraud. [...]

An arbitration panel for the Financial Industry Regulatory Authority (“FINRA”) has made findings against AXA Advisors, LLC and entered an award against the firm exceeding $3.2 million in favor of a New York couple who filed claims against the firm alleging that AXA sold them unsuitable variable annuity and life insurance products. The couple alleged that their AXA financial advisor, Francesco Puccio, made five transactions from 2011 to 2014 which produced large commissions for Mr. Puccio but were damaging to their estate planning and unsuitable for them based on their advanced age. Their claims included negligence, violations of FINRA’s suitability and supervision rules, negligent misrepresentation and omissions of material facts, and breach of fiduciary duty. A panel of FINRA arbitrators found in favor of the couple and against AXA, awarding over $2.2 million to compensate the couple for their losses, plus 9% interest, $67,293.64 in costs, and almost $900,000 in attorneys’ fees: a total award of over $3.18 million. If you [...]

A panel of arbitrators of the Financial Industry Regulatory Authority (“FINRA”) has entered a unanimous decision against Morgan Stanley and its broker, Michael Lee Canney, of Des Moines, Iowa. The complaint was filed by a law firm’s defined benefit employee plan, alleging that Morgan Stanley and Canney breached their fiduciary duties, were neglectful, breached their contract, made negligent misrepresentations, constructive fraud, and supervisory failures. The allegations were that the respondents mismanaged the plan’s portfolio by failing to implement a suitable investment strategy and by overconcentrating the portfolio in a single sector of the S&P. The plan alleged that its losses exceeded $667,000. The panel unanimously awarded the claimant $415,888 in compensatory damages, plus $36,500 in expert witness fees, $2,000 in costs, and $425 for the non-refundable portion of the claimant’s filing fee. At the Frankowski Firm, we have experience handling claims on behalf of investors who have lost money as a result of unsuitable and manipulative investment practices. If you [...]