Securities Representative Cases

These are real stories of cases we have handled for our clients. The names of the parties are not used in order to protect their privacy.

Case no. 1

An elderly widow was referred by her accountant to a stockbroker who was marketing promissory notes issued by a company that loaned money to medical providers. She was seeking a safe investment that would generate a fixed income to provide for her living needs. The promissory notes were represented as "triple-backed" for safety and were supposedly suitable for conservative investors seeking a high degree of income with safety. Shortly after the widow made her investment, the interest payments stopped coming and soon, the promissory notes defaulted. This case was successfully settled through negotiations.

Case no. 2

A physician gave discretionary authority to his long-time stockbroker and financial advisor to make investments for his family trust and his employees' retirement plan. The broker was expected to make investments that were consistent with a moderate risk tolerance. On his own, the broker invested in leveraged exchange-traded funds (ETFs), which are investment vehicles that should be used only by day traders. The use of leverage in the investments increased the risk involved. Within a month, the portfolio lost one-third of its value. This claim was successfully settled through mediation.

Case no. 3

An elderly divorcee who lives alone entrusted her life's savings to a stockbroker who invested the money in risky, small-cap stocks. The broker traded excessively to generate fees for himself. Almost the entire portfolio was lost. To cover up his wrongdoing, the broker forged the client's signature on some self-serving letters, which we were able to establish were false. The arbitration panel awarded full damages, plus costs, attorney's fees and punitive damages.

Case no. 4

A single woman took her life's savings to a stockbroker. She told the broker that this was all the money she had. The broker invested the entire portfolio in a single, small-cap stock, which plummeted in value, essentially wiping out the client's savings. An arbitration panel awarded full damages, based on what a properly managed portfolio would have generated, plus costs, interest and punitive damages.