Stock Broker Arbitration Results in $1.1M Award for 90 Year Old Woman
The brokerage firm William Blair & Co. and two of their former brokers have been ordered to pay $1.17 million to an elderly woman who filed a stock broker arbitration claim, alleging that two of her brokers made illegal changes to her account without her permission and even created a fake e-mail address for her to cover it up.
The complaint was decided by an arbitration panel through the Financial Regulatory Authority (FINRA), which is a non-governmental regulatory body that handles disputes between investors and stockbrokers and other financial firms. The claim was filed by Josephine DesParte, a 90-year old former administrative assistant who learned to play the stock market and became a millionaire.
DesParte charged two of her former stockbrokers, William Ross and Brian Kasal, with breach of fiduciary duty, negligence, negligent supervision and omission. She said that the brokers created a fake internet address for her and then in 2007 changed her account from a non-discretionary and commission-based account to one that was discretionary and fee-based, which cost the elderly woman more than $1 million in losses and fees.
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According to a report by Chicago Business, DesParte points out that the brokers not only misspelled her name and gave the wrong date of birth on the phony e-mail address, but she did not own a computer and had never been on the internet.
Kasal and Ross, who now work at Morgan Stanley, denied any wrongdoing. The two brokers said they visited DesParte in 2007, concerned about the lack of diversity in her account. They said they suggested that she diversify her holdings and suggested she receive transaction statements through the internet, unaware she was unfamiliar with it.
FINRA awarded DesParte stock losses of $655,146, $380,000 in reimbursement for capital gains taxes paid by the liquidation of her stocks, and $82,719 in advisory fee losses. DesParte said she was not interested in punitive damages, and only wanted to recoup what she had lost.
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