Northeast Securities to pay $1.8 million in Finra arbitration claim

Claimants wanted $3 million for alleged fraud, churning and negligence in bond trades

Jul 11, 2017 @ 5:11 pm

By InvestmentNews

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(Getty Images/iStockphoto)

An all-public Finra arbitration panel has awarded a former customer of the firm $1.76 million in compensatory damages in a case involving bond transactions. The claimant, Timothy McLaughlin, had sought damages of $3 million.

Mr. McLaughlin charged the firm and three of its brokers with common law fraud, churning, breach of fiduciary duty, misrepresentation, negligence, gross negligence, negligent misrepresentation, failure to supervise and violation of Finra and Securities and Exchange Commission rules. The case involved corporate bonds, the Financial Industry Regulatory Authority Inc. said in its award document.

Northeast Securities Inc., based in Uniondale, N.Y., also must pay interest on the award at the rate of 9% per year from March 1, 2012 until the award is paid. The firm and its brokers also have to pay Mr. McLaughlin's expert witness fees of $33,840.

The arbitration panel also denied requests from the three brokers named in the case — Stephen Joseph Perrone, Diane Hawkins and Jonathan Michael Zucker — to have their records in Finra's Central Registration Depository (CRD) expunged.

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