Law Firm Green, Schafle & Gibbs Announces FINRA Award of Over $63,000.00 Against Morgan Stanley Smith Barney
PHILADELPHIA, November 2017 -- In a notable FINRA arbitration award released late last month from a Philadelphia, Pennsylvania Arbitrator. Philadelphia-based FINRA attorney arbitration law firm, Green, Schafle & Gibbs, has secured a more than $63,000 arbitration award from brokerage firm Morgan Stanley Smith Barney to an investor who had sought $80,000 in financial damages. The resounding victory returned more than 75% of the investor’s losses due to misconduct by her financial advisor involving inappropriate and unsuitable investments in her investment portfolio.
Excessive Risk and Unsuitable Investments in Client Portfolio
The investor alleged that Morgan Stanley though her financial advisor and Morgan Stanley employee, James Lemonick, of Lancaster, Pennsylvania, placed her in an investment portfolio that involved far more risk than the one that had been specifically designed for her during their initial encounters. While the investor had ratified a conservative portfolio, over time her portfolio had been changed by her financial advisor to a higher risk portfolio, exposing the investor to greater market volatility. Ultimately, this heightened exposure lead to the heavy losses in the equities markets for which the investor sought restitution.
In spite of its best efforts, Morgan Stanley was unable to convince the arbitration panel in this matter that its financial advisor had acted responsibly and in accordance with its client’s wishes.
FINRA Arbitration Awarded Compensatory Damages and Refused Expungement
The panel awarded the investor, a married woman living outside of Philadelphia who had been laid off by a large pharmaceutical firm, more than $63,000 in compensatory damages. The panel also denied a request by Mr. Lemonick to expunge the dispute from his permanent record.
The case was striking for two reasons. First, statistically, Claimants in FINRA arbitration hearings are at a distinct disadvantage. Advocates for investor rights suggest that the less than 50/50 chance that investors will win at arbitration is related to the fact that panels are largely composed of former industry professionals who may be biased toward working industry professionals and brokerage firms; and that typically the strongest claims are settled by Respondents in these matters before they ever reach arbitration. Second, when Claimants do win, it is even more rare that they are awarded a significant proportion of the damages they seek, let alone the more than 75% compensatory damages awarded to the investor in this matter. Morgan Stanley made no offers to settle this dispute prior to the arbitration hearing.
FINRA Securities Litigation Practice Area
A niche practice area, successful FINRA securities litigation requires an experienced litigation team that understands FINRA rules and regulations. Typically, investors may be unaware that losses suffered as a result of financial advisor misconduct may be recovered through litigation; and they are further unaware of the complexity of the process involved in seeking recovery. However, as the award above demonstrates, it is certainly possible to recover a significant proportion of investment losses due to investment improprieties from multi-billion dollar brokerage firms.