Due to the nature of securities arbitration cases, the specifics of our cases are confidential and therefore the names have been changed and the brokerage firms are fictitious.  The following scenarios are based on actual settlements that we have attained for our clients:

Scenario 1:  A couple that had recently retired to South Florida, opened an account with just over a million dollars. These funds represented their entire liquid net worth and they relied on the income from this account to supplement their social security income. The broker recommended investments which over the course of a couple of years caused the account to lose nearly $400,000 in value. A case was filed claiming that the investment advice was unsuitable and at a mediation prior to the beginning of the final arbitration hearing, the case was settled for $350,000 . 

Scenario 2:  Client was an 89 year old widow, who suffered from dementia and lived in a nursing home outside the state of Florida.  Her broker was a young man who worked for a nationally known brokerage firm in South Florida. Over the course of one year her account went from over $500,000 to $15,000. Analysis of the account revealed that there were hundreds of unauthorized trades, primarily in technology stocks. During the course of the investigation, we learned that the broker had a substance abuse problem and was going through a divorce at the time of the unauthorized trading and made the unauthorized trades to generate commissions to increase his income. The case was resolved when the broker’s employing firm agreed to pay $650,000 . 

Scenario 3: Clients had a brokerage account with a large nationally known brokerage firm. Over the course of 3 years the broker made unauthorized trades and unauthorized transfers of securities and monies. To disguise the fraud the broker prepared fake monthly statements and directed the real statements from firm headquarters to an address he controlled. The case was resolved with the firm agreeing to pay nearly $2 million dollars .

Scenario 4:  Client had a large concentration of stock in a single company (a company started by her grandfather).  Ownership of this stock is the client’s only experience investing and this stock represented nearly 100% of the client’s total liquid net worth. Seeking advice, the client turned to a major broker dealer for financial advice and with the idea of diversifying her large position in the one stock.  The Broker dealer set up the account and then failed to diversify the portfolio as promised. Shortly after opening the account, the stock price fell dramatically and the client lost a large percentage of her net worth.  This case was settled for $950,000 at a mediation just prior to the beginning of arbitration.

Scenario 5:  A client living in the South West part of the country opened an account intended to be a “holding account” that would provide a higher rate of interest than paid by banks.  The funds deposited in this account were monthly revenues received on behalf of customers of the client and operating capital for the client’s business. Without regard for the safety of the funds and without fully warning the client of the risks the broker proceeded to trade the account in high risk naked put options resulting in large losses. This case settled for $600,000 at a mediation just prior to the final hearing.

Dickenson, Murphy, Rex and Sloan
a Partnership of Professional Associations
980 North Federal Highway
Suite 410
Boca Raton, Florida 33432
Phone (561) 391-1900
Fax (561) 391-1933

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We serve clients on a national level. Locally, our Securities Practice Group caters to clients throughout Palm Beach and Broward counties, including Boca Raton, Boynton, Cape Coral, Delray Beach, Fort Lauderdale, Gainesville, Hialeah, Jacksonville, Jupiter, Lakeland, Miami, Orlando, Pembroke Pines, Pompano Beach, Port St. Lucie, St. Petersburg, Sunrise, Tallahassee, Tampa, Wellington and Weston.