Below are examples of results that Carlson & Associates, P.A., has obtained for its clients. The results are before deducting for attorneys’ fees and expenses.
$4.1 million. Beck v. SunTrust Robinson Humphrey
Lance Beck was terminated by STRH because of a customer complaint when the auction rate securities market froze in February of 2008. STRH claimed that Beck violated a firm sales practice policy. The arbitrators found that Beck did not violate a firm sales practice policy and awarded Beck compensatory and punitive damages. View Arbitration Award.
$3.8 million settlement against Directors & Officers (“D&O”) of a bankrupt company
Our client was the Trustee in Bankruptcy for a telephone company. We sued the former directors and officers for taking the key assets of the company, putting them in a new corporation, and allowing the former company to go out of business, thereby leaving the creditors with nothing. This is sometimes called a “bust-out scheme.” The case settled just prior to trial for $3.8 million in favor of our client.
$3.8 million. Garcia v. Citigroup
Miguel Garcia was wrongfully terminated by Smith Barney. The arbitrators found Garcia was treated disparately from other employees and awarded compensatory damages and $1.75 million of punitive damages. View Arbitration Award.
$2.75 million Structured Notes settlement against a national brokerage firm
Our client, a high net worth woman, was convinced by her financial advisor to purchase $3.5 million of “100% Principal Protected Notes” issued by Lehman Brothers. On September 15, 2008, Lehman Brothers filed for bankruptcy, leaving the notes almost worthless. The notes were protected as to principal only to the extent of the credit of Lehman Brothers and, thus, the name “principal protected” is very misleading. The case settled prior to trial for $2.75 million, representing 78.57% of the original investment amount.
Investors must be careful when being sold products described as “principal protected” and similar sounding descriptions because they are not really principal protected as one would think of those words. These instruments are not like a certificate of deposit or even a municipal bond.
$2.5 million settlement against First Mortgagor in favor of Second Mortgagor
Our client was the second mortgagor who gave a $5 million purchase money mortgage to the buyer of a large tract of land in downtown Miami. The buyer was a limited liability company with three members, one of whom agreed to provide all of the financing. When property values soured, the financier-member of the buyer stopped funding the payments of principal and interest on the first and second mortgages, created a new company, and entered into a deal to purchase the first mortgage with his new company. He then had his new company file a mortgage foreclosure action, the purpose of which was to remove our client’s second mortgage through the foreclosure process. The law in Florida provides that an owner cannot default on first and second mortgages, purchase the first mortgage, and as the first mortgagee foreclose on the second mortgage, all the while maintaining ownership of the property. This case was settled for the sum of $2.5 million in favor of our client.
$2.25 million. Canaciet v. Prudential Securities
Canaciet is the Ecuadorian national pension fund for telecommunications workers. The arbitrators found Prudential Securities liable for unsuitability, breach of fiduciary duty, negligence, churning, and unauthorized trading. View Arbitration Award.
$2.2 million. Yuhas v. Roan Myers, et. al.
Mrs. Yuhas’ husband died, leaving her with proceeds of a life insurance policy as her sole liquid asset. Broker put her into an options strategy, which was unsutiable, and caused her to lose her nest egg. View Arbitration Award.
$1.6 million. Zojaji v. Merrill Lynch
Todd Zojaji was terminated by Merrill ostensibly for two customer complaints. The arbitrators found there was no basis in fact to support his termination. The panel awarded compensatory damages of $400,000 and punitive damages of $1.2 million. View Arbitration Award.
$1.6 million. Rosensweig v. Morgan Stanley
Phil Rosensweig was terminated by Morgan Stanley ostensibly for three customer complaints. The arbitrators heard the evidnce concerning the complaints and concluded that Rosensweig was entitled to damages for the wrongful termination and expungement of his CRD record. View Arbitration Award.
$1.2 million. Montalvo v. Credit Suisse
Husband and wife sold their business and retired. Their account was mishandled by the brokers. View Arbitration Award.
$875,000 settlement against major law firm for malpractice
Our client hired a major law firm to represent him in the purchase of a 97% limited partnership interest in a limited partnership that was formed to purchase and develop a large piece of property in Palm Beach County. The financing for a multi-million dollar purchase was provided by our client. The General Partner of the partnership was a Florida citizen, who after our client provided the financing, began to siphon off funds by selling portions of the property and not telling our client of the sales. While the limited partnership agreement prohibited the General Partner from selling any property without the written consent of the limited partner, the attorneys failed to record the limited partnership agreement in the Official Record Books of the County, where it would have put all purchasers on notice that the approval of the limited partner was necessary in order to validly transfer title. The case was settled prior to trial for $875,000 in favor of our client.
$600,000 Options Writing Program settlement against major brokerage firm
Our client, an investment fund from Ecuador, invested approximately $1.1 million in an “Options Writing Program” run by two financial advisors from a large international brokerage firm in New York City. The objective of the program was to generate income by selling put options on stocks. The financial advisors did not properly explain the risks of the trading to the client and deviated from the stated strategy, causing the account to lose all of its value and have a debit balance of $220,000. The case settled for $600,000 plus elimination of the $220,000 debit balance in the middle of trial.
This case highlights how things can go wrong when the manager deviates from the manager’s published investment strategy.
$475,000 Wrongful Termination settlement against major brokerage firm
Our client was a former financial advisor employed at a major brokerage firm at a branch office outside of Florida. The advisor was fired after his clients had purchased auction rate securities that had become illiquid. The advisor claimed that the firm told him that the particular auction rate securities purchased by his clients were liquid when, in fact, they had become illiquid. The case settled in the middle of trial for $475,000 in favor of our client.
$400,000 Wrongful Termination settlement against major brokerage firm
Our client was a former financial advisor at a major brokerage firm. The advisor worked with a partner as a team. The advisor was fired after his partner joined a competing firm. The firm alleged that the advisor helped a client move his accounts to his partner at the competing firm. We called the client to testify and the case settled in the middle of trial for $400,000 in favor of our client.