Like every profession, stockbrokers make mistakes. When that happens, brokerage firms should do everything in their power to correct the problem and make the client whole. Unfortunately, that doesn’t always happen. Last week an arbitration panel took harsh action against Meyers Associates, a New York City brokerage firm licensed to do business in all 50 states.
In a case filed by a Tennessee family, Meyers Associates was accused of securities fraud, breach of fiduciary duty, common law fraud, breach of contract and negligent supervision. Barry and Dana Goodman accused the Wall Street firm of mismanaging their investments.
Did the firm settle or admit their mistakes? No. Instead they demanded that the Goodman pay their attorney’s fees.
Evidently, the 3 person arbitration panel wasn’t buying Meyers Associates story. Although the Goodmans’ sought $222,000 in damages, the panel awarded the couple their requested $222,000 plus an additional award of $104,000 for attorney’s fees and retroactive interest at 10% per year. In a very rare move, the panel also awarded the Goodmans $100,000 in punitive damages. With interest, Meyers Associates owes over one half million dollars.
What happened? No one is really sure of the details. Claims against stockbrokers and brokerage firms are generally handled by arbitration before the Financial Industry Regulatory Authority – FINRA. Most customer complaints can be handled within 14 months of filing and the decisions are final.
The decisions are also private. Although panelists can discuss the reasons for their decisions, few do making it difficult to understand what went wrong at the firm.
This isn’t the first problem for Meyers Associates. Since opening its doors in 1993, the firm was forced to defend itself before arbitration panels 9 other times. Each time the company lost.
According to FINRA’s online records, the firm also was suspended at one time for not paying arbitration fees.
If the customer complaints are not enough, the State of Connecticut is trying to shut down the company. The Connecticut Banking Commissioner issued a cease and desist order on February 10th of this year claiming that the company and its CEO, Bruce Meyers, failed to discharge their supervisory responsibilities, engaged in dishonest and unethical practices, sold unregistered securities and failed to cooperate with the investigators.
The company says it is “adamently [sic] appealing.” Their website claims the company’s top priorities are meeting their clients’ goals and providing financial security. If the arbitration history and pending Connecticut regulatory action are correct, they failed at both.
As noted above, everyone makes mistakes. If your broker makes an unsuitable investment recommendation, fails to follow your instructions, churns your account or violates industry rules, the brokerage firm can be held responsible. The company has a duty to supervise its staff and insure that they follow rules.
If you lost money to a broker at Meyers Associates or any other brokerage firm, give us a call. Stockbroker fraud cases are generally handled on a contingent fee basis meaning you don’t pay legal fees unless you win.
For more information, contact attorney Brian Mahany at or by telephone at (414) 704-6731. All inquiries are kept in confidence.
Photo courtesy of photoholic at www.freedigitalphotos.net