Investment and Broker Fraud

We have extensive experience in prosecuting claims of stock broker or securities dealer fraud, and other investment fraud.  We represent customers, broker-dealer firms, and individual registered representatives in a wide variety of broker-dealer cases.  Some our most significant past engagements involving broker-dealer claims involve the following:

Claus v. ICM, Inc.  Defended broker-dealer in eight-day NASD hearing filed by another firm’s broker.  ICM had set up $2.4 million bond trade with claimant, but then instructed claimant to sell them to another broker-dealer.  Claimant tried, but new firm refused to buy.  Claimant alleged fraud and breach of contract; respondents alleged claimant bought bonds before finalizing trade.  Claimant alleged more than $400,000 in damages arising out of losses because no one would buy claimant’s bonds as price plummeted.  Panel awarded $60,000, including $40,000 payable directly to claimant’s attorney, after broker conceded in cross-examination that he had suffered no lost profits because he had sold the bonds for exactly the price he had bought them.  U.S. Magistrate Judge Mary Malloy granted ICM’s motion to vacate award in its entirety on grounds that panel’s award of attorney’s fees directly to claimant’s attorney exceeded arbitrators’ authority. 

Andrew Reid Municipal Bond Case. Represented claimant in NASD customer claim of securities fraud, unsuitable trading and investing, churning, and breach of fiduciary duty; broker used forged account transfers in taking a portfolio of millions of dollars in investment grade municipal bonds and degrading it into a portfolio consisting of obscure and speculative “junk.” After an eight-day final hearing, an NASD arbitration panel awarded more than 100% of the claimant’s out of pocket losses against respondent Corporate Securities Group, Inc. (n/k/a Wachovia Securities Financial Network). Three other respondent firms settled for confidential amounts.

Horton, et al v. Southwest Securities, Inc.  Represented multiple investors in “selling away” investment fraud scheme perpetrated by sales representative against major securities broker-dealer that refused to take responsibility for the actions of its sales force. Result – Confidential settlement in 2005.

Enrique Perusquia/PaineWebber Cases.  The Perusquia cases are reported to be the largest securities arbitration claim in the history of NASD arbitration.  Dispute involved broker’s falsified account statements to portray customers as holding blue chip stocks and bonds; in reality, broker had put the vast majority of customers funds in essentially one South American gold-mining company, which paid the broker large kickbacks.  Broker forged countless powers of attorney, authorizations, checks, and other documents.