Facts

Claimants the Fisher Intervivos Trust and the Spatz 1974 Trust claimed that Wedbush Morgan Securities Inc. and Michael P. Farah had made unsuitable purchases of collateralized mortgage obligations for their accounts. The dispute was submitted to arbitration.

CLAIMANTS' CONTENTIONS:
Claimants alleged breach of fiduciary duty, fraud, negligent misrepresentation, breach of contract, respondeat superior, and elder abuse. They also claimed violation of federal and state securities laws, NASD Conduct rules and NYSE rules.

RESPONDENTS' CONTENTIONS:
Unless specifically admitted in their Answers, respondents denied the allegations and asserted various affirmative defenses.

Damages

Claimants requested rescission damages. In the alternative, they sought $410,491.32 in compensatory damages, treble damages, lost opportunity costs, punitive damages, interest and costs. Respondents Wedbush and Farah requested dismissal of the claims, costs, and an assessment of all forum fees to claimants. Respondent Farah also requested attorney fees and expungement of this matter from his CRD records.

Result

Claimants and respondent Wedbush entered into a confidential settlement agreement and claimants dismissed their claims against respondent Wedbush. Claimants' claims against respondent Farah were denied and dismissed with prejudice. Claimants' request for monetary sanctions was also denied. Respondent Farah's request for expungement was also denied. Each party bore their respective costs.

Other Information

ARBITRATORS: Robert J. Ruben, chair, public arbitrator; Allan H. Coleman, public arbitrator; Joy Diane Williams, non-public arbitrator.