NYSE Arbitration Award Summaries, May 2002

A summary of the 18 awards issued in May

NYSE AWARDS, 5/02: Among the customer-initiated matters that concluded at the New York Stock Exchange in May were 10 ML Media-related Awards, a stipulated Award granting expungement, one small claims arbitration, and 7 others.

The seven Customer-Member claims split 3-4 in terms of wins and losses for the investor. The ten Awards relating to claims against Merrill Lynch regarding its ML Media Opportunity Partners limited partnership all charge misrepresentations as to investment diversification and are being handled, presumably through some global arrangement, via the Simplified Arbitration procedures. Thus, one Arbitrator decides the case without the necessity for a face-to-face hearing. These cases have generally been going in Merrill’s direction and this lot is no different. Only three of the ten resulted in a monetary award to the investor. Interestingly, the same Claimant’s lawyer appeared in all three cases, but he also appeared (with the same lawyer for Merrill appearing as well) on five of the seven losing cases.

Another of the seven offers some specific findings (Baja v. Merrill Lynch, Chicago, 4/26/02), wherein we learn that one reason for the dismissals may be timeliness. The recent “occurrence or event,” for purposes of Rule 603, is determined to have taken place in September 1991, while the parties have stipulated that the Statement of Claim was not filed until August 1999. The Arbitrator concludes that “Ms. Baja’s claim is not eligible for submission to arbitration and her Statement of Claim is dismissed with prejudice.”

One of the three “wins” awarded twice as much in interest as the compensatory award, for a full award of more than $30,000 (Moses v. Merrill Lynch, NYSE ID #2002-009864, Philadelphia, 5/28/02).

On the industry side, all of the Claimants won, but in six cases, it was the brokerage firm as Claimant, while in two others, it was the employee as Claimant.

The only one that caught our attention was Lebenson v. Salomon Smith Barney, NYSE ID #1999-007633 (New York, 5/24/02), where the broker’s common law, ERISA, and CUTPA claims for $3,000,000 (plus attorney fees of $182,441, resulted in a compensatory award of $30,600 for the broker and $85,000 in attorney fees. The Panel does not explain the basis for the attorney fee award; it does give specific directions as to the amendment of the Form U-5 and removal or expungement of the DRP-5. (ed: NYSE Awards are generally available for viewing and printing on the NYSE WebSite, at or about the time we cover them in the Arb Alert. Go to www.nyse.com/arbitration and choose “Decisions.”)


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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.


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