An elderly client was awarded $142,168 by a Financial Industry Regulatory Authority Inc. arbitration panel as a result of claims that his brokerage firm, Garden State Securities Inc., had put him into unsuitable investments and had overtraded his account.
Anthony Romano, who's in his late 70s, lost money due to such unsuitable investments as penny stocks, stocks of Chinese-owned companies, and leveraged exchange-traded notes, according to the attorneys representing him, Adam Nicolazzo and Robert Van De Veire of Malecki Law in New York.
“They were really boom or bust products,” said Mr. Van De Veire, adding they weren't appropriate for a senior investor concerned about his monthly expenses.
In addition to shifting his investments into more speculative stocks, Mr. Van De Veire said the costs associated with trading in the account were too high. In his statement of claim, Mr. Romano requested at least $142,168 in compensatory damages plus punitive damages, attorneys' fees and other costs, according to a Finra dispute resolution document dated July 5. At the close of the arbitration hearing in New York, he sought $214,349 in compensatory damages, while requesting $72,982 in punitive damages plus attorneys' fees and other costs, the document shows.
Mr. Romano was awarded $142,168 and denied any other relief.
“Garden State Securities disagrees with the award and is disappointed the arbitrators saw fit to award any damages in this case,” said Ian Frimet, a partner at Wexler Burkhart Hirschberg & Unger who is representing the brokerage firm. “Even though the arbitrators awarded only 66% of the damages claimant sought, and denied the request for attorneys' fees, punitive damages and costs, we believe any award was unjustified,” he said.
Steven Trigili, chief compliance officer at Red Bank, N.J.-based Garden State Securities, didn't return phone calls and an email seeking comment about the Finra arbitration award.