Finra panel awards $815,000 to National Asset Management client over fiduciary breach

But arbitrators said 30% of the fault lies with the 'negligent' claimants

Apr 22, 2019 @ 2:38 pm

By InvestmentNews

A Finra arbitration panel has ordered National Asset Management to pay more than $815,000 in compensatory damages in a case going back to 2015 involving charges of unsuitable trading practices.

While claimants in the case, two trusts of William M. Butler Jr., asked for damages in the amount of $1.87 million, the Financial Industry Regulatory Authority Inc. panel determined that while National Asset Management breached its fiduciary duties, the claimants were also negligent.

More: Finra panel awards schoolteachers $2.38 million in fraud case

As a result, the Finra panel apportioned 30% of the fault to them and denied all claims other than breach of fiduciary duty.

The claimants charged that National Asset Management and its registered representative engaged in fraud, breached Illinois blue sky laws, violated the state's Financial Exploitation of an Elderly Person statute, and engaged in unsuitable trading strategies that involved writing call options and buying penny stocks, Chinese stocks and a leveraged exchange-traded fund.

In total, the claimants will receive $815,335.71 in compensatory damages, plus interest, $326,134.29 in attorneys' fees and $3,766.81 in costs.

More: Better screening by Finra could curb expungements

The panel also decided to deny an expungement request by the registered representative involved.


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