Securities Law News Update, From the Securities Law Home Page

   

]]> Home | Message Board Home Search Arbitration Investors Brokers Finance Law Compliance Archives NFA Arbitrators Award $43 Million
Commodities Claimants Collectively Win award in Consolidated Cases, with Common Counsel on All Sides

THE BIGGEST AWARD – EV-AH! We are not much on scoops, but we have not seen this new NFA decision trumpeted in the media as yet — $43.1 million, by our calculations.

The amount was allocated among thirteen sets of Claimants, who were awarded compensatory damages, punitive damages, and pre-Award interest against Refco, Inc. by a three-person, New York City Panel of the National Futures Association! The punitive damages element of the total award amount just exceeds $1 million and only three of the Claimant sets won punitive assessments. The Awards are separately issued, although the claims were heard on a consolidated basis with common counsel representing all sides.

Refco, Inc. (nka Refco, LLC) was the main Respondent and the only one charged with punitive damages. Constantine Mitsopoulos, S. Jay Goldinger, and Capital Insight Brokerage were the additional Respondents. Capital Insight and Goldinger answered but did not appear at any of the hearing sessions that occurred over the course of almost 3 years.

The “Case Summary” is pretty detailed, especially for NFA, but how was so much money lost? The nature of the allegedly improper activity is explained in only a phrase: Respondents “allocated futures trades and transferred positions among accounts.” (ed: Shades of Hillary Clinton!). The Awards are individually crafted, the amounts awarded are proportionate to the claimed amounts in differing degrees, and the claims, while similar, were each filed at a different time during 1996 and 1997. One Claimant, Robert Elliott, won $10.4 million in compensatory damages and $5.2 million in interest (97 ARB 157). The smallest awarded amounts went to the Crosby Claimants for $169,674 and $83, 989 in interest (97 ARB 190). Only one prior Award approached this one in terms of the amount awarded and that was an industry case. $38.2 million was awarded to a single individual in Prescott Ball & Turben, Inc. v. Kanuth (SAC ID No. 8912058N, Wash. DC, 5/2/90), but that was an intra-industry case. (SAC Ed: NFA has information about its Arbitration Awards posted on its WebSite, www.nfa.futures.org. To view summaries of these Awards when you reach the Site, select “BASIC,” enter in the “NFA ID No.” search blank, “0001975,” for Refco. and proceed from there.)


Copyright 2000-2002 Securities Arbitration Commentator, Inc. P.O. Box 112, Maplewood, NJ 07040; t: 973-761-5880 f: 973-761-1504. Materials denoted with a SAC Reference No. (e.g. SAC Ref. No. 99-01-001) are on hand at SAC and may be obtained by calling the Securities Arbitration Commentator, or by email to help@sacarbitration.com. The Securities Arbitration Commentator is the leading publication for securities arbitration news and information, and maintains the most complete database of arbitration awards availalble anywhere. For more information regarding their services, visit their website at www.sacarbitration.com

Nothing herein is intended as legal or financial advice. The law is different in different jurisdictions, and the facts of a particular matter can change the application of the law. Please consult an attorney or your financial advisor before acting upon the information contained in this article. 


Return to The Securities Law Home Page 

Visit Beam & Astarita, LLC, securities arbitration, regulation and litigation attorneys

]]> ]]>