Stockbroker Arbitration: Large Sums Awarded

Tyler, TXA commonly-held belief is that if you are looking to recover a large amount of lost money, the best way to get it is through a lawsuit. However, stockbroker arbitration claims can also help investors recover lost money—and not just small amounts. Furthermore, stockbroker arbitration is often the only way to go about getting money back because of an investment contract that sets out the methods by which investors can attempt to recover lost funds.

One claim that was recently settled in arbitration saw the complainant awarded over $4 million. The claim involved the former president of Bank of America in Tyler, Texas. The former president, Brent Lemons, pleaded guilty to two counts of fraud for stealing money from Venna Stubbs. Court documents allege that Lemons stole over $400,000 from his customers, including Stubbs.

Stubbs' attorney said that Stubbs relied on Lemons as a trusted adviser; however, he stole money from her bank account to pay off gambling debts. The whole time, Lemons reassured Stubbs that her money was safe. In handing down its ruling, the arbitration panel found that Lemons was guilty of common law fraud, common law theft and statutory fraud.

Two other victims were awarded $1.3 million by a FINRA arbitration panel for their claims against Lemons earlier this year.

Meanwhile, the Securities and Exchange Commission (SEC) has filed charges against a former MetLife Securities stockbroker alleging he embezzled approximately $6 million from his customers. The charges claim that the broker used the money, from at least 30 MetLife customers, to fund private real estate deals. The SEC further claims that the former broker forged customer signatures on wire transfer forms and other forms and also convinced customers to invest in two companies he owned, telling the customers that they were MetLife investments.

The SEC has also charged another broker with misappropriating funds. In that case, the broker is accused of forging the signature of the widow of a Port Authority police officer who was killed on September 11, 2001. The forged signatures were used to transfer money from a joint account into the broker's own account. Although he was fired from MetLife in February 2007, the broker continued to pretend he was still employed with the company to obtain more money from the widow.

Stockbroker arbitration has been in the news lately because of claims filed regarding auction rate securities. FINRA has set up a special arbitration program that ensures the industry panel member has not worked for a company that sold auction rate securities. Although some companies involved in auction rate securities are in negotiations with regulators involving possible settlement agreements, people with money in auction rate securities are urged to file a FINRA arbitration claim, as that may ensure they receive their money back much more quickly than if they wait for a settlement to be finalized.

If you lost money due to the unscrupulous actions of a broker, contact a lawyer to discuss your options. You may be eligible to file a stockbroker arbitration claim against the broker and against the company he or she worked for.