Peeved about losses, Bahamas couple files $5M arbitration claim against Merrill

A securities arbitration claim of $5 million has been filed against Merrill Lynch by a Freeport, Bahamas couple who say the preferred financial company stocks the company sold them were unsuitable, according to the law firm representing the couple.
AUG 20, 2009
By  Bloomberg
A securities arbitration claim of $5 million has been filed against Merrill Lynch by a Freeport, Bahamas couple who say the preferred financial company stocks the company sold them were unsuitable, according to the law firm representing the couple. The arbitration claim was filed with the Financial Industry Regulatory Authority Inc. of New York and Washington at the end of June by Klayman & Toskes PA, a law firm in Boca Raton, Fla. The couple held accounts with Merrill Lynch’s Boca Raton branch office and granted their financial adviser discretionary authority to manage their assets, according to the complaint. “Instead of recommending a suitable investment strategy to reduce the investors’ risk, Merrill Lynch engaged in an aggressive strategy of purchasing numerous financial preferred stocks, thereby overconcentrating the claimants’ accounts,” one of which had been pledged as collateral against loans taken out through Merrill Lynch, the law firm said in a statement. The couple suffered significant losses and eventually received a margin call of about $2 million, according to the statement. The preferred stocks were in such financial companies as Deutsche Bank AG, Bank of America Corp., Credit Suisse Group AG, Ambac Financial Group Inc., ING Groep NV and Barclays Global Investors. Bill Halldin, a spokesman for Merrill Lynch & Co. Inc. of New York, declined to comment. The couple making the complaint does not want their names publicized, said Steven Toskes, a partner at Klayman & Toskes.

Latest News

Five-person Raymond James team jumps to Janney in Maryland
Five-person Raymond James team jumps to Janney in Maryland

The group led by a 37-year industry veteran brings $470 million in assets to the Philadelphia-based broker dealer.

$20B Merit looks to next phase as Constellation takes minority stake
$20B Merit looks to next phase as Constellation takes minority stake

The Atlanta, Georgia-based national wealth firm revealed its new PE partner as prior backers Wealth Partners Capital Group and HGGC’s Aspire Holdings exited their investments.

$350M father-son duo hops from Osaic to Equitable Advisors
$350M father-son duo hops from Osaic to Equitable Advisors

The latest departures in Ohio mark another setback for the hybrid RIA, which is looking to "expanding its presence across all models and segments of the wealth management industry.”

Fresh off HPS acquisition, BlackRock inks deal for $7.3B ElmTree Funds
Fresh off HPS acquisition, BlackRock inks deal for $7.3B ElmTree Funds

The St. Louis-based real estate investment firm gives the asset management giant a valuable access point to the roughly $1 trillion net lease market.

SEC charges Chicago-based investment adviser with overbilling clients more than $2.5M in fees
SEC charges Chicago-based investment adviser with overbilling clients more than $2.5M in fees

Eliseo Prisno, a former Merrill advisor, allegedly collected unapproved fees from Filipino clients by secretly accessing their accounts at two separate brokerages.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.