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South Florida FINRA Arbitration Panel Holds Merrill Lynch Liable for More Than $25,000

On December 31st, 2019, a FINRA arbitration panel based in Boca Raton, FL ordered the licensed brokerage firm Merrill Lynch, Pierce, Fenner & Smith, Inc. to pay two investors $25,739.00 in compensatory damages (Case Number: 18-04115). The panel determined that a portion of the investors’ losses were caused by the firm’s negligence. Below, our Miami investment fraud lawyers provide an overview of the arbitration panel’s decision.

Broker Negligence: Adjustable Life Insurance Policy 

The claimants—trustees representing trusts held by the same family—raised two causes of action against Merrill Lynch: broker negligence and breach of fiduciary duty. The causes of action were related to damages that were sustained by the claimant’s John Hancock Flexible Premium Adjustable Life Insurance Policy.

An adjustable life insurance policy is a complex financial product that is not necessarily suitable for all investors. Essentially, it combines some of the characteristics of both term life insurance and whole life insurance. It can carry significant fees and there are risks involved that should be disclosed to investors.

After assessing the evidence presented by all parties, the Boca Raton, FL FINRA arbitration panel determined that Merrill Lynch was liable for common law negligence. The broker-dealer was ordered to pay $25,739.00 in compensatory damages. Although, each party was deemed responsible for bearing their own fees and expenses.

Understanding Common Law Negligence as an Investor Loss Claim 

Negligence is a theory that has a broad application across a wide range of legal matters. In the most simple terms, a defendant is negligent if they fail to act with the appropriate standard of care. In Florida, financial advisors and brokerage firms may be held legally liable if investors suffer losses as a result of their negligent guidance.

Notably, some, but not all, financial professionals owe their customers a fiduciary duty—that being a higher standard of care that requires a representative to act in the best interests of their clients. As a general rule, registered investment advisers (RIAs) are held to higher standards than brokers. Still, brokers and brokerage firms can still be held liable for fraud or negligence, even if they do not owe a fiduciary to their clients.

If you or your family member suffered financial losses because of the recklessness or carelessness of a financial advisor or broker-dealer, you may be able to hold them accountable through a common law negligence claim. An experienced Florida investor losses attorney will be able to review your case, explain your rights and options, and help you take action to recover financial support.

Call Our Miami FINRA Lawyers for Immediate Assistance With Your Claim

At ​Carlson & Associates, P.A., our securities fraud lawyers represent investors in a wide range of legal matters, including broker negligence claims and breach of fiduciary duty claims. Call us now to arrange a confidential assessment of your investment losses case. With a law office in the heart of Miami, we handle FINRA arbitration claims throughout the state of Florida.


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