Bank executive wins six-figure arb award over CBO losses

Finra awards bank executive $870,000 over suitability of TW Tax Advantaged Fund

A Finra arbitration panel awarded more than $870,000 to a former Deutsche Bank AG chief executive for his losses in complex investments he bought from First Republic Securities Company LLC.
The Financial Industry Regulatory Authority Inc. panel in San Francisco ruled March 29 in favor of James Zeigon, who claimed First Republic Securities failed to perform an adequate “reasonable basis” suitability determination before selling him complicated investments, including collateralized bond obligations.
The panel threw out claims concerning two of the investments because of Finra’s six-year time limit on the submission of claims, but found in Mr. Zeigon’s favor regarding his investments in collateralized bond obligations and the TW Tax Advantaged Fund LP, according to his lawyer, Cary Lapidus.
“We are pleased with the award and we think it demonstrates that even sophisticated people can be misled about very complicated investments,” Mr. Lapidus said from his San Francisco office.
Mr. Zeigon had sought about $2.1 million, according to the Finra arbitration award.
Greg Berardi, a spokesman for First Republic Securities, declined to comment. The arbitration documents said the firm denied the allegations.
Mr. Zeigon was managing director and chief executive of Deutsche Bank’s Global Institutional Services division from March 2000 until 2002, when he retired. Before that, he was with Chase Manhattan Corp. for 23 years, ending his career there as a senior managing director and head of Chase Global Services, Mr. Lapidus said.