Facts

Harold Edmonson filed a complaint against First Midwest Securities Inc. and Kyle Nonnenmann, in connection with his investments. Nonnenmann, who was Edmonson's broker/dealer, passed away in the middle of the proceedings, and therefore the FINRA Panel dismissed all claims against him with prejudice.

CLAIMANT'S CONTENTIONS:
Edmonson asserted causes of action for breach of fiduciary duty; suitability; negligence; breach of contract; failure to supervise; common law fraud; constructive fraud; control person liability; and violation of IL 815 ILCS 5/13 et seq. Edmonson contended that respondents misrepresented the leveraged equity trade funds, securities sold, and the manner in which trading was done in his account. Edmonson also contended that First Midwest failed to monitor his account, and failed to recommend securities with minimal risk, which was contrary to his conservative investment objective.

RESPONDENTS' CONTENTIONS:
Respondents denied Edmonson's allegations, and asserted various affirmative defenses.

Damages

Edmonson sought compensatory damages in excess of $106,000.

Result

The Panel found that a trade that occurred on Jan. 20, 2009 was outside of Nonnenmann's limited discretionary authority, and was therefore unauthorized. As such, First Midwest was liable to Edmonson for $14,629 in compensatory damages.

Other Information

ARBITRATORS: James A. Murphy, Susan L. Walker and Jack J. Herman