New York Securities Lawyer Blog
Recently, on July 30, 2012, a Financial Industry Regulatory Authority, Inc. (“FINRA”) arbitration panel in Birmingham, Alabama rendered a FINRA arbitration award against a brokerage firm and an investment advisor firm, respectively known as First Legacy Securities, LLC and The Legacy Financial Group, Inc. (collectively referred to as “Legacy”), based upon Claimants’ allegations that Legacy manifestly disregarded Claimants’ investment by mismanaging their brokerage account and by providing Claimants with unsuitable investment recommendations. On or about January 7, 2011, Claimants filed a Statement of Claim against Legacy, alleging the following causes of action: (1) misrepresentations, omissions and violations of the Alabama Securities Act; (2) unsuitability; (3) fraud; (4) breach of fiduciary duty; (5) negligence and wantonness; (6) breach of contract; (7) unjust enrichment; (8) vicarious liability/respondeat superior; (9) controlling person liability; (10) failure to supervise; (11) conspiracy; (12) egregiousness of conduct; and (13) infliction of emotional distress. Legacy denied all claims in its Statement of Answer. After eight days of testimony, the arbitration panel rendered an award which held that Legacy was liable to Claimants for its sales practice abuses. The arbitration panel awarded Claimants $585,000.00 in compensatory damages, which included an interest rate of 6% per annum. Additionally, the panel awarded punitive damages to Claimants in the amount of $250,000.00 pursuant to Mastrobuono v. Shearson Lehman Hutton, Inc. et al., 514 U.S. 52, 115 S.Ct. 1212, 131 L.Ed.2d 76 (1995), based on an application of the standard of reckless disregard for others. If you have suffered losses from investments, and believe that you are a victim of sales practice abuses, please call Lax & Neville LLP for a free consultation at (212) 696 – 1999.