Dolores Shira v. ML Stern & Co., LLC, Michael Rosenmayer
Published: Oct. 29, 2002 | Result Date: Aug. 27, 2002 | Filing Date: Jan. 1, 1900 |Case number: 0104005 Arbitration – $25,000
Court
Case Not Filed
Attorneys
Plaintiff
Defendant
Experts
Plaintiff
Arthur S. Leider
(Investors Arbitration Specialists LLC)
(technical)
Facts
The claimant brought an action for breach of fiduciary duty and negligence against her former broker Michael
Rosenmayer and the brokerage house ML Stern & Co., LLC. The claimant, a senior citizen, alleged improper
trading in her securities account due to the purchase of high yield bonds.
The claimant alleged that she was told that the investments were safe, secure and had been fully and
adequately researched. The claimant alleged that the investments were, in fact, high risk and therefore not
suitable for her account.
The respondents denied making any misrepresentations and further denied that the purchases were unsuitable
for the account. The respondents asserted that the claimant was aware of the trades in her account and gave
authority for all trades in the account.
Additionally, the claimant had maintained an account with ML Stern for approximately seven years and
throughout that time had actively traded in high yield bonds with much success. The claimant had purchased
approximately 30 high yield bonds over the years and only two had failed to turn a profit. The two that had
failed to turn a profit were the subject of the arbitration.
The claimant contended that there had been improper trading in her securities account due to the purchase of
high yield bonds and that the respondent had made misrepresentations about the investments.
The claimant further contended that the investments were high risk investments and therefore not suitable for
her account.
The respondent denied making any representations and further denied that the
purchases were unsuitable for the account. The respondents contended that the claimant was
aware of the trades in her account and gave authority for all trades in the account. Additionally,
the claimant contended that the account performed well and suffered only two losses in
approximately 30 high yield positions.
Settlement Discussions
The respondents offered $30,000 prior to arbitration.
Damages
The claimant requested compensatory damages in the amount of $66,979, plus punitive damages in the amount of $200,000, expert witness fees of $3,000 and attorney's fees and costs in the amount of $20,000.
Other Information
The respondent ML Stern was ordered to pay $25,000 in compensatory damages. The respondent broker was dismissed with prejudice. The arbitration panel consisted of Harvey Flodin, Sally Williams and Arnold Packer.
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