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Bourdev v. JPMorgan Chase ⇒ $350,000 + revision of Form U-5 language
$350,000 on behalf of a registered representative/banker who was terminated from JPMorgan Chase. After a full evidentiary hearing, a FINRA arbitration panel awarded $350,000 in compensatory damages for defamation and/or wrongful termination and ordered that the language on her Form U-5 be changed to reflect that she did not engage in any wrongdoing and that the company conducted a deficient investigation.
Pacific Stock Exchange v. Cox Securities, et. al. ⇒ $1.54 million
The Law Offices of Cary S. Lapidus obtained an award of $1.54 million on behalf of the Pacific Stock Exchange who retained Lapidus as special counsel to prosecute the case. In addition to the monetary award, Lapidus obtained a Decision ordered the permanent bar of the Pacific Exchange member from membership with the Pacific Stock Exchange.
Breiman v. Round Hill Securities, Inc. et. al. ⇒ $1.44 million
The Law Offices of Cary S. Lapidus obtained an arbitration award of $1.44 million on behalf of clients who alleged fraud, breach of fiduciary duty and misrepresentations in connection with their securities portfolio.
WCM, LLC v. Cooper ⇒ $1.56 million (plus attorneys fees and expenses)
The Law Offices of Cary S. Lapidus obtained an award of $1.56 million on behalf of a registered investment advisory firm and two of its partners who retained Lapidus to recover money allegedly misappropriated by one of their partners. In addition to the $1.56 million monetary award, Lapidus' clients were awarded their attorneys' fees and expenses. The arbitrator also found that the firm's expulsion of the partner was "For Cause".
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.
Teller v. Denison ⇒ $1.3 million
The Law Offices of Cary S. Lapidus obtained an arbitration award of $1.3 million, including in excess of $349,000 in attorneys' fees and costs on behalf of a client who alleged a breach of contract in connection with the private sale of securities.
Smurzynski v. Kensington Wells, Inc., et. al. ⇒ $1.84 million (including $1 million in punitive damages and interest)
The Law Offices of Cary S. Lapidus obtained an arbitration award of $1.84 million including $1 million in punitive damages and interest for clients who alleged that the stocks they invested in were manipulated and that material facts were misrepresented to them.
Hall v. Morgan Stanley Dean Witter, et. al. ⇒ $1.76 million
The Law Offices of Cary S. Lapidus obtained an arbitration award of $1.76 million for clients who sustained losses in a complex investment known as a Prepaid Variable Forward Contract. The clients also alleged the recommendation of unsuitable investments in their stock portfolio.
Levinthal v. First Republic Securities Company, LLC ⇒ $2.17 million
The Law Offices of Cary S. Lapidus recovered $2.17 million for clients who sustained losses in a complex municipal arbitrage bond fund. The clients alleged that the fund was unsuitable for them and that the firm that recommended and sold the investment had failed to perform proper due diligence. The award is notable for awarding the full amount of the clients' damages, including out-of-pocket losses and arbitration expenses.
Dozens of settlements and awards on behalf of clients
Cary S. Lapidus has obtained dozens of settlements, awards and judgments on behalf of his clients since leaving the Securities and Exchange Commission, where he worked in the Enforcement and Market Regulation Divisions.
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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
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STANFORD PROFESSOR STUNG BY FUND WINS $2.2 MILLION
Bloomberg Businessweek
July 07, 2010
A First Republic Bank unit was ordered to pay a retired Stanford University professor and his wife $2.18 million after arbitrators found the firm gave them only a 'fleeting and slapdash' explanation of a municipal bond fund that imploded during the credit crisis in 2008.
Eight months after Elliott and Rhoda Levinthal entrusted $3 million to a leveraged investment vehicle called TW Tax Advantaged Fund LLC, it collapsed, an American Arbitration Association panel wrote in a July 2 ruling. Evidence shows workers at First Republic didn't try to fully grasp risks in the fund they designed, the panel found. The firm also inadequately trained a saleswoman who dealt with the Levinthals, and didn't ensure they understood the investment.
The education offered to the Levinthals 'was fleeting and slapdash,' arbitrators wrote. 'An investment in a highly complex and concededly risky product like the fund, sold in this fashion, is by definition unsuitable' for someone with their experience and objectives.
Greg Berardi, a spokesman for the San Francisco-based company, declined to comment. Bank of America Corp. acquired First Republic Bank while buying Merrill Lynch & Co. last year, and sold it last week to an investor group that included founder James H. Herbert II.
Elliott Levinthal, 88, is a professor emeritus of mechanical engineering at Stanford. He and his wife endowed Levinthal Hall, a lecture hall at the Stanford Humanities Center.
Compensatory Damages
The panel ordered First Republic Securities to pay the couple and their trust $2.1 million in compensatory damages, plus $78,153 in fees and expenses.
About 35 retail mutual funds marketed as leveraged municipal arbitrage strategies have failed in recent years, said Craig McCann of the Securities and Litigation Consulting Group Inc., a Virginia consulting firm that testified for the Levinthals in the arbitration. Brokerage firms sold the funds as 'higher-yielding alternatives to conventional municipal bond portfolios with little, if any risk,' he said in a 2009 report.
Funds using the strategy contended that the market had historically mispriced the yield on municipal bonds compared with taxable bonds. Exploiting that difference to create a profit relied on hedging long-term municipal bond positions with taxable, shorter-term interest-rate swaps. When long-term municipal bond yields rose in 2007 and 2008 faster than short- term rates declined, the strategy failed and portfolios of many funds were liquidated, according to the report written by McCann and four colleagues.
Less Liquid
The strategy ignored more than 30 years of research showing that municipal-bond yields tend to be higher on a tax-equivalent basis because most such bonds are callable and less liquid than corporate bonds, which also are mostly non-callable, the report said.
The Levinthal case is probably the largest individual award related to the municipal arbitrage strategy, McCann said in an interview. Citigroup said in March 2008 it would provide $1 billion to bail out six of its leveraged municipal bond funds, sold under the names ASTA and MAT.
'First Republic Investment Management created and managed the fund, and it was sold through First Republic, but we learned that they had never run a fund like this before,' said Cary Lapidus, a San Francisco lawyer who represented the Levinthals. The fund was only sold to clients of First Republic, which caters to high-net-worth customers at 57 offices in five states, he said.
While the Levinthals received written materials that explained the fund's risks, those disclosures didn't fulfill First Republic's obligations, arbitrators said.
'An investor may put his or her head in the sand, but only after the professional has done everything within reason to bring to the investor a full, fair and balanced understanding,' the panel wrote.
Please contact us for assistance with securities arbitration law, securities litigation, broker misconduct, investment advisor misconduct and investment losses.
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