In October, a Finra arbitration panel ordered Citigroup to pay former 'Dallas' star Larry Hagman a whopping $11.6 million for, among other things, breach of fiduciary duty. Yesterday, a judge threw out the award, saying that one of the panel members may not have been impartial.
J.R. Ewing loses one?
It hardly seems possible. Yet, according to a report in The Wall Street Journal, a California judge yesterday overturned an $11.6 million award to Larry Hagman, the actor best known for his portrayal of the nefarious oil tycoon on the long-running television show "Dallas."
The claim, against Citigroup Global Markets, stemmed from unspecified securities in accounts Mr. Hagman controlled and the purchase of a life insurance policy.
On Oct. 6, a three-member Financial Industry Regulatory Authority Inc. panel awarded Mr. Hagman, two trusts in his name and two retirement accounts in his name the following: $1.1 million in compensatory damages and $440,000 in legal fees. The panel also awarded the actor a whopping $10 million in punitive damages.
But yesterday, Judge Michelle Rosenblatt in Los Angeles County said that Peter D. Steinbroner — chairman of the three-member Finra panel that ruled in Mr. Hagman's favor — should have disclosed that both he and his wife had brought a similar claim against an investment partner, the Journal reported.
According to that paper, Judge Rosenblatt said California state law requires a neutral arbitrator to disclose "dealings that might create an impression of possible bias."
The initial award by the Finra panel was unusual due to the sizeable punitive damages awarded to the actor, who also starred in the hit Sixties sitcom "I Dream of Jeannie." The Finra panel did stipulate that Mr. Hagman donate the $10 million punitive award to a charity of his choosing.
Mr. Hagman, 79, filed the arbitration claim with Finra in May 2009. As is common in such suits, he alleged breach of fiduciary duty and breach of written contract, along with fraud by misrepresentation and omission, and a failure to supervise.
The three arbitrators did not disclose the reasoning for their decision at the time of the award.
The Journal was unable to contact Mr. Hagman's attorney. But a Citigroup spokesman told the paper, "We are pleased with the court's decision."
