US Airways Awarded $15 Million by a New York Panel
A New York Financial Industry Regulatory Authority (FINRA) arbitration panel awarded US Airways $15 million in compensatory damages related to investments in illiquid auction rate securities (ARS). US Airways asserted various causes of action including unsuitability, negligent misrepresentation, negligence, failure to supervise and breach of fiduciary duty, among others. At the close of the hearing, US Airways requested $91.235 million in compensatory damages.
The Panel determined that the Respondents, Ronald Hansalik, George Barclay Perry and Joseph Arena were jointly and severally liable and ordered the three to pay $15 million in compensatory damages to US Airways. Additionally, the $45,600 in forum fees for the arbitration were split equally between the parties at $22,800 each. (FINRA# 09-06905; US Airways, Inc. v. Ronald Hansalik, Lars Jacobson, George Barclay Perry and Joseph Arena).
Although it is not indicated in the award, the purchases of the auction rate securities (ARS) appear to have been purchased during the time that the Respondents were employed as brokers for Lehman Brothers, which failed on September 15, 2008 making the largest bankruptcy filing in U.S. history. This means that US Airways will likely not ever receive any of this money since it is against individual brokers and since Mr. Hansalik was suspended for failing to comply with a prior FINRA award against him.