Stock Broker Elder Financial Abuse Claim Results in $1.6M Award

A panel of arbitrators through the Financial Industry Regulatory Authority (FINRA) has awarded a 95-year old man $1.6 million in damages against StockCross Financial Services in a stock broker fraud claim that resulted in triple damages based on a finding of elder abuse.

The claim was filed in March 2009 on behalf of David Wolfson, who alleged that StockCross and two of their brokers, Thomas B. Cooper and Peter L. Boorn, took advantage of Wolfson’s age and “bilked” the elderly investor of nearly all of his assets, including cash reserves, home equity and insurance money, and then dropped him as a client.

According to the elder financial abuse claim, the brokers put Wolfson’s money into overly risk investments, actively traded on margin and encouraged him to leverage his him equity into investment capital. Wolfson asked the panel to award compensatory damages of more than $300,000, disgorgement of all commissions and fees paid, lost opportunity costs and other damages, including statutory and treble damages.

In an award issued on December 21, the FINRA panel sided with Wolfson and found that StockCross Financial Services is liable for more than $1.6 million in damages, including $319,798 in compensatory damages and a rare award of treble damages in the amount of $959,394 under the Financial Elderly Abuse Act. The FINRA panel also blasted StockCross for withholding evidence and not taking FINRA, or the law, seriously.

“Respondents seem to take FINRA’s Code, Discovery Guide, and Notice to Members very lightly,” the panel admonished after placing a laundry list of discovery missteps by StockCross into its final ruling. The panel hit the firm with an additional $10,000 in damages for its disregard for discovery orders.

FINRA is a non-governmental regulatory body that handles the resolution of disputes between investors and stockbrokers and other financial firms. It was created in July 2007 as a successor to the National Association of Securities Dealers, to arbitrate stock broker fraud claims that can include charges of breach of contract, breach of fiduciary duty, negligence, misrepresentation, unauthorized trading and other claims that investments were improperly handled.

Financial abuse arbitration complaints have spiked since the sub-prime mortgage market collapsed near the end of 2007.