Bauer v Morgan Stanley Dean Witter - $175,000 NYSE Award
In August 2002, an NYSE arbitration panel in Memphis, TN ordered Morgan Stanley Dean Witter to pay Claimant $175,000. Dr. McCann testified for the Claimants.
Millar v Merrill Lynch - $7.74 Million JAMS Award
In July 2002 a JAMS arbitration panel awarded a couple $7.74 Million arising out of claims of breach of contract, negligence and fraud against Merrill Lynch. The panel found that Merrill Lynch breached duties to formulate and implement suitable investment strategies. The panel also found that Merrill Lynch failed to offer and explain hedging strategies suitable to the Claimants' objectives prior to the expiration of a post-IPO lockup. Finally, the panel found that Merrill Lynch's covered call writing was not a suitable strategy for dealing with the Claimants' concentrated position. This award has been mischaracterized as a simple failure to execute a sell order case. We have posted the award so that you can read the panel's conclusions for yourself.
District Court Affirms $7.74 Million Award Against Merrill Lynch
The award in Millar v Merrill Lynch was noteworthy, and not only for its size. The panel decided Merrill Lynch breached a contract to provide suitable investment advice to the Millars. Merrill Lynch appealed the award. The District Court in affirming the award recently made clear that brokerage firms cannot sell themselves as offering world class investment advice, even to customers like the Millars with non-discretionary accounts, and then claim to be only order takers when they deliver negligent or incompetent advice.