Facts

Claimant was a retiree who turned over his retirement account to Citigroup Global Markets Inc., formerly Salomon Smith Barney. Claimant was a Mexican immigrant who had invested his 401K retirement savings, after 30 years working as a bookkeeper at the same company. He was a moderately conservative investor with no prior brokerage firm accounts. He also had a serious disability and a grown child (dependent) with a serious disability. Advisor invested the client's assets in a "managed account" with 44 percent of assets into individual technology and telecommunications stocks.

CLAIMANT'S CONTENTIONS:
The claimant alleged breach of fiduciary duty, unsuitable investments, negligence, fraud, negligent misrepresentation, Cal. Corporations Code sec. 15402, and negligent supervision.

RESPONDENT'S CONTENTIONS:
The respondent contended that asset allocation and investment recommendations were suitable, that claimant "ratified" all of advisor's investment decisions, and that losses were caused by market downturn.

Result

Arbitration award of $87,500. Arbitrators found that the advisor breached his fiduciary duty, recommended unsuitable investments, and acted negligently.

Other Information

ARBITRATORS: Cheryl Kershner, Sharon Maier, James Riewerts. FILING DATE: Feb. 1, 2007.