Facts

Todd Simon was the Chief Marketing Officer of Omaha Steaks. He filed a suit against Oppenheimer & Co. arising out of the sale of auction-rate securities that became illiquid in early 2008 when the market for such securities froze. Simon asserted causes of action for misrepresentations, breach of fiduciary duty, violation of FINRA's conduct rules, and violations of the Nebraska Securities Act. Simon claimed that Oppenheimer purchased several auction-rate securities for him, but failed to disclose the auction process in which the securities were traded, the fact that there had been auction failures prior to the ones at issue, and the effect failed auctions could have on each security.

The matter proceeded to arbitration.

Damages

Simon requested $1,075,000 in compensatory damages in his original complaint. By the time of the hearing, Simon had sold some of his securities at a loss of $187,625 and retained some others worth $525,000.

Result

Oppenheimer was found liable and ordered to pay $187,625 in compensatory damages, $63,000 in pre-judgment interest, and $40,000 in attorney fees.

Other Information

ARBITRATORS: Bruce Keplinger, James E. Nash, Thomas J. Pleiss.