Coutant v. Morgan Stanley Dean Witter, et. al. ⇒ $1.01 million

The Law Offices of Cary S. Lapidus obtained an arbitration award of $1.01 million on behalf of clients who alleged that their securities brokerage firm failed to diversity their account, placed them in unsuitable investments and misrepresented the risks of options trading.

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“Cary Lapidus is probably the most well prepared attorney with whom I have ever dealt. He has excellent judgment and understanding of the law. Most important of all, he is highly ethical and those who deal with him know that his word is his bond.“
Paul Dubow
Opposing Counsel & Mediator in Six Cases

In The News

Herb Greenberg
San Francisco Chronicle
April 22, 1994

Stephen S., of Santa Rosa, writes: 'Yesterday I found out that my 77- year-old mother entrusted the greater part of her life savings -- all of $23,000 -- to a broker in late 1992 with instructions to purchase securities that would provide monthly dividend payments without great risk to principal. She knows nothing about investing. Her broker told her that she would gain or lose no more than $2,000 on her principal, and that she would receive monthly dividend checks that would fluctuate.
'As it turns out, her investment has declined by more than 30 percent, or $7,000. My mother claims that she contacted the broker on a few occasions over the past year with concerns about her declining principal, and was told that she was overlooking the good yield she was getting -- and was advised to hold the investment.
'Is there any legitimate complaint against the broker? If so, who should the complaint be addressed to, and what remedy, if any, should she seek?'
If you can prove your broker didn't follow your instructions -- and made unrealistic promises, such as what your losses or gains would be limited to -- you may have a case.
'If somebody tells a broker they don't want their principal at risk, and interest rates are low, then a fixed-income investment wouldn't be suitable for that customer,' says San Francisco securities attorney Cary Lapidus.
The best way to file a complaint would be to start by contacting the firm's branch manager. If he gives you the runaround, then write a formal complaint to the firm's compliance department. If that doesn't help, you'll probably have to arbitrate the complaint, which you can do yourself. (With a loss of just $7,000, it probably wouldn't pay to hire an attorney. But there are a number of services designed to help small investors.)
What remedy should your mother seek? It never hurts to start by asking for everything. Some firms will pay the entire amount to shut you up and make you happy. Others will reach a compromise -- somewhere in the middle. Still others may feel your complaint isn't justified, and will offer nothing.
Most of your mother's investments were in bond mutual funds. Like many unsophisticated investors, it sounds like she made the mistake of buying them just as interest rates hit bottom. The lower interest rates are, the greater the risk because (I might sound like a broken record, but this is important) as interest rates rise, your principal -- the amount you invested -- falls.
That's the trouble with bond funds. Unlike individual bonds, they never mature, so you're never guaranteed of getting all of your money back when interest rates rise.

Please contact us for assistance with securities arbitration law, securities litigation, broker misconduct, investment advisor misconduct and investment losses.

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