Facts

Claimant Dolores White, individually and on behalf of the Dolores White IRA, brought a NASD arbitration claim against Respondent A.G. Edwards & Sons Inc. The claim arose out of the respondent's purchase of a Manulife Financial Venture variable annuity in her IRA account. The claimant asserted causes of action for breach of fiduciary duty, fraud, constructive fraud, intentional and negligent misrepresentation, failure to supervise, violation of federal and state securities laws, violation of California statutory and common law and violation of NASD Rules of Fair Practice and NYSE Rules. The claimant added an allegation of elder abuse in her Amended Statement of Claim.

The respondent denied the allegations of wrongdoing. It asserted various affirmative defenses.

Damages

The claimant sought at least $70,000 in compensatory damages, lost opportunity costs, disgorgement, restitution, unspecified punitive damages, pre- and post-judgment interest and costs, including attorney fees. The respondent requested dismissal of the claimant's Statement of Claim in its entirety. It also requested costs.

Result

The Panel denied the respondent's motion to dismiss, or alternatively, for a directed verdict. The respondent must pay the claimant $142,839 in compensatory damages, as well as $100,000 in punitive damages for constructive fraud and breach of fiduciary duty. The respondent must also pay the claimant interest in the amount of seven percent per annum on the unpaid balance of the total award beginning 30 days from service of the award until the award is paid. The respondent must also pay the claimant $97,135 in attorney fees.

Other Information

Arbitration Panel: Alan Stamm, Harry Miller and Robert P. Clifford.