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Awards in 14 Cases, including two where firms lost promissory note claims.
NYSE AWARDS, 9/02: Fourteen Awards were released by the NYSEs Arbitration Department for the month of September, comprised of 10 customer-initiated arbitrations, two debit balance cases, and two trainee agreement cases.
Four of the ten customer-initiated cases resulted in monetary awards to the customer, the largest of which occurred in Corey v. Prudential Securities, Inc., NYSE ID #2001-009164 (New York, 9/9/02), where the customer won $153,000 on a $1 million-plus claim.
Meehan & Boden v. TD Waterhouse Investor Services, NYSE ID #2001-009095 (New York, 10/3/02) occasioned a second look, because it alleged unsuitable margin transactions, unauthorized transactions, and fraudulent preparation of account documents against a discount/online brokerage firm. The primary conduct, though, may have related to the non-member firm and unregistered investment advisor, Williams Capital Management and Jon Williams, who were initially named in the Statement of Claim. The Arbitrators permitted the withdrawal of those claims, without prejudice, and awarded two of four Claimants $62,000 on total claims of $274,000.
Member firms brought two claims against former employee-brokers for alleged breach of trainee agreements and fared poorly. In Prudential Securities v. Cusa, NYSE ID #2001-009616, New York, 9/12/02), a $20,000 claim yielded $500 in damages and, in Salomon Smith Barney v. Hendrix, NYSE ID #2001-009350 (Charlotte, 9/18/02), the Panel awarded nothing. According to the Hendrix Award, the Chairperson issued an order for production in early August and followed with a conditional order of sanctions directing SSB to comply with the earlier order. At the first hearing in early September, Respondent requested dismissal of the Statement of Claim based on Salomon Smith Barneys failure to comply with the chairpersons orders. The Panel unanimously agreed to dismiss with prejudice, concluding that Salomon Smith Barney did not comply in good faith with the chairpersons prior discovery orders. The claim for $32,500 was denied as a result, apparently without a merits hearing.
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