Raymond James Hammered for $1.5M in Dallas

A Financial Industry Regulatory Authority arbitration panel in Dallas, Texas awarded an elderly couple nearly $1.5 million in compensatory damages, expenses, attorneys’ fees and IRS penalties. The claim was related to the recommendation and purchase of various deferred variable annuities and there were various causes of action asserted, including breach of fiduciary duty, suitability, fraud, failure to supervise, negligence and breach of contract, among others. Apparently the broker began selling the elderly couple life insurance and variable annuity products and switching them out generating huge fees and commissions for himself and the firm.

The claim was filed in May 2010. In June 2010 the Claimants requested an expedited hearing due to Claimant’s age. Unfortunately, Claimant Mildred Tyler passed away in September 2010 and the panel allowed her claim to continue under the Estate of Mildred Tyler, Deceased, Bill Tyler, Independent Executor. Claimants settled with LPL, one of the firms that the broker had worked with and took the Claimants’ accounts with him when he moved.

After the conclusion of the evidentiary hearing, the panel consisting of all public arbitrators decided that Raymond James was liable and ordered them to pay the Claimants $1,129,796 in compensatory damages, 5% interest per annum from December 1, 2006 up to the award, $34,988 in expenses, $82,281 in costs for IRS penalties and taxes due and $250,000 in attorneys’ fees. Additionally, the panel assessed the entire $14,850 in forum fees of the arbitration against Raymond James. (FINRA#10-02162; Hurshel Tyler and His Wife Mildred Tyler, By and Through Her Power of Attorney Bill Tyler v. Raymond James Financial Services, Inc. and LPL Financial Corporation).

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