Securities Arbitration

Brokers Must Consider New Market Realities When Determining the Suitability of Asset Allocation for Young Investors

February 19, 2015 | By Ross B. Intelisano

Does the conventional wisdom regarding asset allocation hold up in today’s economy? The New York Times recently featured an article suggesting that a portfolio teeming with risky stocks, derivatives, and other exotic investments may, in fact, not be suitable for even young investors. The Times points out that these young investors experience higher rates of unemployment and are more likely to cash out their 401(k)’s and other investments when they switch jobs. An appropriate suitability analysis under FINRA Rule 2111 would take these factors into account. It is highly likely that many brokers are still using a one-size-fits-all asset allocation formula for their young customers.

Investors may have a variety of claims against such brokers who fail to take into account current market conditions, including unsuitable investment advice, fraudulent misrepresentations and omissions, and failure to supervise.

Bloomberg: Goldman Sachs Asks Court to Throw Out $20.5 Million Bayou Creditors’ Award

October 17, 2011 | By Ross B. Intelisano

Below is a Bloomberg article about our firm’s $20.6 million FINRA arbitration award against Goldman Sachs related to Bayou. It’s the largest arbitration award ever rendered against Goldman. The award was confirmed by Judge Rakoff and Goldman filed it’s brief to the Second Circuit.

Goldman Sachs Asks Court to Throw Out $20.5 Million Bayou Creditors’ Award By Bob Van Voris – Oct 15, 2011

Goldman Sachs Group Inc. (GS) filed an appeal seeking to dismiss a $20.5 million arbitration award to creditors of the failed hedge fund firm Bayou Group LLC.

WSJ: Goldman Continues to Fight $20.5 Million Award in Pivotal Case

October 14, 2011 | By Ross B. Intelisano

Below is a WSJ article about our firm’s $20.6 million FINRA arbitration award against Goldman Sachs related to the Bayou hedge fund fraud. It is the largest arbitration award ever rendered against Goldman. The award was confirmed by Judge Rakoff of the SDNY in November 2010 and Goldman filed it’s brief to the Second Circuit this week.

Goldman Continues to Fight $20.5 Million Award in Pivotal Case By LIZ MOYER

NEW YORK-Goldman Sachs Group Inc. is continuing to fight a $20.5 million arbitration award that, while relatively small from the big bank’s perspective, has broader implications for Wall Street.

Largest MAT Award Rendered Against Citi

February 10, 2011 | By Ross B. Intelisano

A Florida FINRA panel awarded $6.4 million to an investor in Citi’s MAT municipal bond arbitrage fund this week. It’s the largest award rendered against Citi related to its MAT and Falcon proprietary fund blow-ups. The case is Berghorse v. Smith Barney (FINRA 08-04466). Although damages claimed on the award were $12 million, sources say the net out of pocket losses were under $10 million, making the award amount over 64% of the losses. The 29 hearing sessions also make it the longest MAT arbitration to date. This substantial award follows a string of 100% NOP awards rendered against Smith Barney late last year. Below is an On Wall Street piece about the case.

FINRA: Citi To Pay Investors $6.4M By Lorie Konish February 9, 2011

A Financial Industry Regulatory Authority panel has ordered two parts of Citigroup Inc. to pay $6.4 million to make up for investment losses tied to a group of troubled municipal arbitrage trust funds.

Rich & Intelisano Wins Punitive Damages Award

February 7, 2011 | By Ross B. Intelisano

Rich & Intelisano recently won a FINRA arbitration award which included $100,000 in punitive damages. The case is Stora, et al. v. Strasbourger, Pearson et al. (FINRA 09-01769). We represented a group of investors who were defrauded by a broker dealer and its registered representatives. Matthew Woodruff of our office tried the matter which included five hearing sessions. The panel awarded the claimants $373,968 in compensatory damages, plus interest. The award is significant because pursuant to the Mastrobuono Supreme Court decision, the panel awarded claimants $100,000 in punitive damages, a rarity in securities arbitrations.

NY Times: Goldman’s $20 Million Consequence

December 3, 2010 | By Ross B. Intelisano

Below is a New York Times piece about the Firm’s $20.6 million arbitration award against Goldman Sachs being upheld by Judge Rakoff in a sternly written opinion.

DealBook – A Financial News Service of The New York Times November 30, 2010, 6:16 pm Goldman’s $20 Million Consequence By SUSANNE CRAIG

Goldman Sachs made its bed. Now Judge Jed S. Rakoff says the Wall Street firm has got to lie in it.

Ross Intelisano Named to 2010 New York Super Lawyers List

October 4, 2010 | By Ross B. Intelisano

New York Super Lawyers, a publication of The New York Times Magazine, has named Ross B. Intelisano as one of New York’s top Securities Litigation attorneys in their 2010 publication. The list of Super Lawyers recognizes lawyers from more than 70 practice areas who have attained a high degree of peer recognition and professional achievement in their respective fields. Super Lawyers’ selection process is a vigorous multi-phase rating process based on peer nominations and evaluations, combined with third-party research. Their selection process has been recognized by bar associations and courts across the country.

Ross Intelisano is the only attorney on the 2010 New York Super Lawyers top Securities Litigation list who primarily represents institutional and individual investors in securities arbitration.

SEC Charges Morgan Keegan with Fraud Related to Bond Funds

April 7, 2010 | By Ross B. Intelisano

Today, the SEC charged Morgan Keegan & Company, Morgan Asset Management and two employees with fraudulently overstating the value of securities backed by subprime mortgages. These are the first federal government allegations related to the Regions Morgan Keegan bond funds which lost significant value in 2008. The serious charges come on the heels of a string of recent FINRA arbitration multi-million dollar awards against Morgan Keegan related to the funds.

Morgan Keegan is the subject of numerous arbitration cases relating to over $2 billion of losses in RMK proprietary bond mutual funds managed by James Kelsoe and decimated due to allegedly risky investments. Kelsoe was charged by the SEC. Many law firms around the U.S., including our firm, have been retained by investors who lost money in the Regions Morgan Keegan funds.

It will be interesting to see how the SEC allegations effect the firms’ litigation strategy of trying most of the arbitration claims to award. Here is the text of the SEC release.
Continue reading

Securities Arbitration Filings Up

October 2, 2009 | By Ross B. Intelisano

4,991securities arbitration cases have been filed at FINRA this year as of the end of August 2009. That is a 65% increase from 2008. Based upon our firm’s case log and speaking with other attorneys who represent investors in securities arbitrations, I expect the numbers to increase even more by year end. The dramatic drop in the securities markets in 2008 and 2009 exposed some dubious behavior, including the misrepresentation of bond funds as low risk (ie Morgan Keegan, Citigroup MAT and Falcon, Schwab Yield Plus). Also, structured products, such as the Lehman Brothers Structured Notes sold by UBS, were pitched as safe alternatives to bonds and imploded causing many arbitration claims. The increase in case filings in 2008 and 2009 is the first big spike in filings since the 2001 through 2003 time period after the tech market collapsed. New case filings reached almost 9,000 in 2003. Many inexperienced attorneys jumped into the securities arbitration practice area after the tech bubble and got clobbered by savvy defense counsel. With the Madoff and Stanford scandals generating so much attention to the investment fraud area, we’ll see if it happens again in this cycle.

Securities Attorneys Multiply

June 27, 2009 | By Ross B. Intelisano

Securities arbitration attorneys seem to be everywhere. Since the market collapse last October and the high profile securities frauds committed by Bernie Madoff and Allen Stanford, the ranks of attorneys who represent investors has grown significantly. As other litigation areas have struggled in this new economic climate, securities fraud is alive and kicking. Many litigators who have little experience in securities fraud arbitration and litigation are now holding themselves as experts in the space. Be wary.

Representing investors who have been defrauded by brokerage firms, investment advisors, banks, hedge funds and trust companies is a very specialized practice area. Investors searching for counsel should ensure that any securities attorney they hire has been through the wars with the investment industry. Significant securities cases are often defended by the large Wall Street law firms. A neophyte will be exposed.

How does one find an experienced securities attorney? A good place to start is PIABA – the Public Investors Arbitration Bar Association (piaba.org). PIABA is a national organization of attorneys who represent investors in arbitration proceedings against Wall Street firms. The PIABA site has a listing of attorneys by state who handle these matters. Speak to multiple attorneys before you hire one. After being taking advantage of once by the investment industry, make sure you’re not making mistake number two. Hire attorneys who practice securities law for a living.