NEW YORK, April 25, 2011 (GLOBE NEWSWIRE) -- A Boca Raton, Florida Based Financial Industry Regulatory Authority (FINRA) arbitration panel awarded $2,388,230.05 to a client of the nationally recognized Manhattan, NY Securities Arbitration Law Firm of Stuart D. Meissner, LLC. The award was 100 cents on the dollar for the alternative damage figure presented to the panel of three arbitrators for the mishandling of its client's account and at least 138% over any potential settlement being offered. The panel also assessed all $32,400 in forum fees against the brokerage.
The focus of the claim was the failure of Morgan Stanley Smith Barney (NYSE:MS) and its predecessor firm Smith Barney to properly protect a large over-concentrated position in American Express stock, which account contained a substantial margin balance, the failure to recommend proper hedging strategies, unsuitability and the inept implementation of options transactions, as well as unauthorized trading commencing in October 2008, coinciding with the financial collapse of 2008. As asserted in the Claim, the Meissner firm's 85 year old client was formerly a highly sophisticated investor, having been a Regional Director in the former Shearson Lehman/American Express up until his retirement in the 1980s. The employment was the originating source of the stock at issue in the Claim. The client was suffering from Dementia in 2007 and all trading in the account ceased and remained dormant from 2007 up until October 2008, when the client's wife and daughter sought assistance, as the account collapsed without anyone managing the account, and as the brokerage firm failed to contact the family to recommend any hedging strategies, such as a European or OTC Collar, which would have protected the account. In October 2008 the client's family sought out the assistance of their broker, David Dworsky, who was based in the New York city branch and was referred by him to a fellow broker, Martin Askowitz, who was known as the branch's options expert. Following an internal agreement between the two brokers to divide commissions, Mr. Askowitz then entered a series of options trades over the next several months which resulted in charging the client over $60,000 in commissions alone; such negligent trading was the focus of the arbitration hearing in which ten witnesses testified, including Askowitz and Dworsky, as well as a neurological expert on dementia.
"The award represents 100% of the alternative damage analysis presented to the panel during the hearing on behalf of our client," stated Stuart D. Meissner Esq., who represented the investors. Meissner continued, "This case represents the beginning of a growing trend of cases involving financial advisors who either take advantage of, or fail to protect their elderly clients suffering from dementia, Alzheimer's and other ailments, consistent with NTM 07-43." FINRA Notice to Members 07-43, issued in September 2007, reminded the brokerage industry of their obligations relating to Senior Citizen investors. "Due to the nature of the victim in this matter, this case should be the poster child for the industry to be proactive in protecting its Senior clients rather than sitting on its hands or worse, collecting fees off these accounts and taking advantage of these clients and their unsophisticated families."
The Meissner firm maintains its unique record of never having lost any in-person arbitration.*
*Prior results do not predict a similar outcome in the future.