Facts

Claimants Donald and Jennifer Tasto, trustees of the Donald L. Tasto Ph.D. Profit Sharing Plan and Donald L. Tasto IRA filed a complaint against Morgan Stanley DW Inc. and their account executive. The dispute involved investments in various stocks, including Cisco, EMC and Intel. The dispute was heard by an NASD arbitration panel.

CONTENTIONS:
Claimants alleged a failure to recommend and use hedging strategies, including collars and stop loss orders, constituted negligence, fraud, negligent misrepresentation, breach of contract, breach of fiduciary duty, and violation of state securities laws. Respondents denied claimants' allegations and denied any liability. They asserted various affirmative defenses.

Damages

Plaintiff sought $1.5 million in damages, plus $1 million in punitive damages and costs. Respondents requested dismissal of claimants' claims, fees and costs, and an expungement order removing all reference to the matter from the account executive's CRD file.

Result

At the conclusion of claimants' case in chief, respondents' motion to dismiss all claims was granted on the grounds that claimants had failed to prove any of the essential elements of each cause of action alleged. The panel found that the claims against the account executive were false and recommended expungement. Respondents' request for attorneys' fees against claimants was denied but all NASD Forum Fees were assessed against claimants. Each party bore its own costs.

Other Information

Arbitrators were Paul F. Faberman, Cheryl R. Kershner, Esq., and Thomas W. Borden.