by Brian Mahany
On August 2nd we wrote about brokerage giant Raymond James taking on FINRA. An arbitration panel awarded an 87 year old man $1.7 million for mismanaging his brokerage account. Rather than pay the victim, Raymond James took the highly unusual step of challenging the award. A Dallas judge ruled this week that the brokerage firm must pay.
Hurshel Tyler and his wife Mildred claimed that their stockbroker had mismanaged their account. They claim that the broker had made unsuitable investment recommendations. They say that the variable annuities and variable life insurance policies with long payout periods were not suitable for elderly clients with a short life expectancy.
Raymond James refused to make the Tyler’s whole forcing them to file an arbitration complaint. Almost all disputes against stockbrokers are handled by arbitration before the Financial Industry Regulatory Authority or FINRA. The FINRA rules make it easier and quicker for victims to have their “day in court.” Unfortunately, Mildred didn’t live long enough to ever see any of her money returned.
After a hearing, the panel awarded Hurshel almost $2 million dollars. Except in very limited circumstances, there is little ability to appeal FINRA’s decision. Unfortunately, that didn’t stop Raymond James. I worried that Hurshel might also pass away during the appeal. Luckily, a Dallas judge heard the case on an expedited basis and ruled against Raymond James.
Incredibly, rather than apologize, the firm thumbed it’s nose at regulators and the court and called the award a “miscarriage of justice.” Thankfully they did pay, however. Hurshel has now lost his wife and is 87 years old. Hopefully he still has some time left to enjoy his award.
Appeals of arbitration decisions are extremely rare. Win or lose, the system is designed to give quick closure to all parties. Not liking the result is not a valid ground for appeal. Victims generally like arbitration because the case doesn’t linger in the courts for years. Stockbrokers and broker firms like arbitration because they need not fear a “runaway” jury willing to award millions in punitive damages.
If you are the victim of any type of investment or stockbroker fraud, give us a call. Our fraud recovery lawyers have helped people across the U.S. get back their hard earned money. All inquiries are confidential.
Mahany & Ertl – America’s Fraud Lawyers. Offices in Milwaukee, Wisconsin; Detroit, Michigan & Portland, Maine. Services in most locations.