Facts

Guadalupe Sandoval, Javier Chavez, Jose Fuentes, Maria Alonso, and Roberto Nogales filed a complaint against Charles Schwab & Co. Inc.; Crowell, Weedon & Co.; Fidelity Investments Institutional Services Co. Inc.; Fidelity Brokerage Services LLC; MAM Wealth Management LLC; Alexander Martinez; Morgan Stanley Smith Barney LLC; and Rafael Sanchez asserting several causes of action against each respondent.

Claimants alleged causes of action for breach of fiduciary duty, negligence, fraud, deceit and omission of material fact, fraudulent concealment, negligent misrepresentation, violation of federal and California securities laws and regulations, violation of California's elder abuse/dependent adult civil protection act as against Fuentes only, violation of FINRA Rules, and conversion. The claims were related to claimants' investment in MAM Wealth Management Real Estate Fund I L.P. and various Dean Witter proprietary products.

RESPONDENTS CONTENTIONS:
Respondents denied all allegations and asserted various affirmative defenses. Charles Schwab filed a cross-complaint against Mam, Sanchez, and Martinez for indemnification.

Damages

Claimants sought to recover for the loss of their respective retirement savings of more than $3 million in monies entrusted to respondents as well as disgorgement of commissions, fees, and other taxes, interests, and penalties incurred. Claimants also sought attorney fees and costs associated with the arbitration.

Result

Claimants eventually resolved their claims against Charles Schwab, MSSB, Fidelity Brokerage Services, and Crowell. As such, those claims were dismissed with prejudice. Claimants voluntarily dismissed their claims against Martinez and MAM, pursuant to a prior settlement agreement reached between the parties. Charles Schwab settled it's cross-claim against MAM, Martinez, and Sanchez. Thus, its cross-claim was dismissed without prejudice. The claimants thereafter entered into a consent decree with Sanchez. As such, the FINRA Panel approved the stipulated award and entered judgment in favor of claimants. Nogales received $1,227,558; Fuentes received $1,282,709; Chavez received $1,299,101; Sandoval received $661,150; and Alonso received $100,000 under the consent judgment.

Other Information

ARBITRATORS: Michael D. Harrison, Neil S. Jasper and Daniel Su