Dallas, TXRaymond James Financial Services has been ordered to pay almost $2 million in a stockbroker arbitration judgment against the company. The stockbroker arbitration award came after an elderly client filed a stockbroker arbitration claim against Raymond James. For many investors, stock fraud arbitration is the only way to recover losses incurred as a result of unethical stockbroker practices because client agreements prevent them from filing a lawsuit.
According to Investment News (11/30/11), in May 2011, a FINRA arbitration panel ordered Raymond James Financial Services to pay an elderly client around $1.7 million plus interest. The client, 87-year-old Hurshel Tyler and his now-deceased wife filed arbitration against Raymond James alleging their money was put into unsuitable investments.
Investment News reports that the Tylers had around $3.5 million in bond funds but were encouraged by a former broker for Raymond James to put their money into variable annuities and variable life insurance. A FINRA panel found that the broker made unsuitable investments and that Raymond James failed to supervise its broker, according to Advisor One (12/02/11).
After FINRA issued a ruling in favor of the Tylers, Raymond James appealed the decision, arguing that the Tylers should have returned the annuities, which had grown in value. Furthermore, Raymond James argued that it was not responsible for attorneys' fees because Florida law, which is where Raymond James is headquartered, does not allow awards for attorneys' fees.
A Dallas district court disagreed with Raymond James and ordered the company to pay Hurshel Tyler $1.8 million.
A spokesperson for Raymond James said the company believes FINRA was wrong in holding the financial firm responsible for losses incurred by the Tylers. The company said the Tylers had gains of more than $800,000 while their money was with Raymond James and their losses did not occur until their accounts were transferred from Raymond James to a different broker-dealer. But the Tylers alleged that their broker, who ran a Raymond James office, moved the Tyler's money from one variable annuity to another, costing their account losses in surrender fees and commissions.
Stockbroker arbitration claims can be filed against financial firms or stockbrokers who are believed to have put clients' money in unsuitable investments, or churned accounts to make additional commissions.
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