Facts

Robert Kraynak, the Robert Kraynak IRA, Leslie Kraynak, and the Leslie Kraynak IRA filed a complaint against Charles Schwab & Co. Inc. related to their investments in Fannie Mae and Freddie Mac preferred stock.

COMPLAINANTS' CONTENTIONS:
Complainants asserted claims for unsuitable investments, violation of the California Corporate Securities Act and Regulations, breach of contract, constructive fraud/breach of fiduciary duty, violation of the NASD and NYSE Conduct Rules, respondeat superior, negligence, and negligent supervision.

RESPONDENT'S CONTENTIONS:
Respondent denied the allegations and asserted various affirmative defenses. Respondent also requested the expungement of non-parties Patrick Bentivegna and Jeffrey Miner's records.

Damages

Claimants requested $271,594 in damages plus interest, fees and costs, as well as punitive damages.

Result

Ultimately, the FINRA Panel concluded that claimants were victims of the market, and that respondent could not be held liable for their losses. Consequently, it denied their claims in their entirety. Next, the Panel recommended the expungement of the non-parties' records.

Other Information

ARBITRATORS: Steven A. Wawra, Mark S. Priver, Anita Rae Shapiro. FILING DATE: Sept. 30, 2013.