Broker-Dealer Litigation - Greenberg Traurig LLP

C.1.b
SEC v. Betta, 2011 WL 4369012 (S.D. Fla. Sep. 19, 2011).
The court denied plaintiff’s motion for summary judgment. Plaintiff alleged that
Gagliardi and nine other defendant representatives materially misrepresented the risks and
characteristics involved with collateralized mortgage debt obligations (“CMOs”). Plaintiff filed
a motion for summary judgment and claimed there was no genuine issue of material fact as to
whether Gagliardi either knew, or should have known, that CMOs were inappropriately risky and
complex for investors who had preservation of capital as their main objective. The court held
that, as a matter of law, the SEC offered insufficient evidence to meet the summary judgment
standard. The court found that Gagliardi presented evidence (from the NASD) that suggested the
risks associated with CMOs were not clearly established.
Guenther v. B.C. Ziegler and Company, FINRA Case No. 10-00558, Jan. 13, 2011.
C.1.b
Claimants asserted lack of suitability and violation of Rule 10b-5. Claimants requested
compensatory damages in the amount of $250,000 and $20,000 in other costs. The panel denied
and dismissed with prejudice all of claimants’ claims. The panel ruled that claimants’ financial
advisor did not make unsuitable recommendations of securities transactions to claimant. The
panel also found that claimant failed to prove any monetary damages that occurred as a result of
claimant’s financial advisor’s conduct.
Wynns v. Citigroup Global Markets, Inc., FINRA Case No. 10-00278 Sep. 14, 2011.
C.1.b
Claimants brought an action against respondents alleging, amongst other allegations,
violations of Rule 10b-5 and unsuitability. Claimants requested relief in the form of $241,000
worth of compensatory damages and $125,000 worth of punitive damages. The panel found
respondents jointly and severally liable to claimants for the sum of $92,400 in compensatory
damages, $45,045 in interest and $35,000 in attorneys’ fees. Despite this ruling, the panel
reasoned that any allegations or proofs regarding the failure of respondents to monitor the
investment options in the Universal Variable Life Insurance Policy were clearly erroneous. The
panel further ruled that the claimants’ FA was not involved in the alleged investment-related
sales practice violation, forgery, theft, misappropriation, or conversion of funds.
C.1.b
Prud’homme v. Merrill Lynch, Pierce, Fenner, & Smith Inc., FINRA Case No. 09-05271 Sep.
19, 2011.
Claimants asserted the following causes of action, amongst others; violation of 10(b) and
Rule 10b-5 of the Securities Exchange Act of 1934 and violation of FINRA Rule 2310.
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