Our client is a national broker-dealer which was originally named as a defendant in an action filed in Pennsylvania state court. This difficult claim arose from an unfortunate but all too common series of tragic events.  Plaintiff claimed he suffered from cognitive impairment and was duped by fraudsters who convinced him he won an overseas lottery.  He was told he needed to pay taxes on the winnings before he could collect the prize money.  He informed our client to distribute money from his brokerage account to his bank account.  He then wired the money from his bank account to the con artists who misappropriated his funds.  He claimed that our client breached its fiduciary in permitting the distributions and should have called his trusted contact to prevent possible financial exploitation.  The parties stipulated to compel the matter to FINRA arbitration, and the court approved the stipulation.  Our team then engaged in third party discovery to include obtaining information regarding the ill-fated distributions from Claimant’s bank account to the fraudsters. Third party discovery also revealed no medical diagnosis of any cognitive impairment.  After this third party discovery was produced and we filed the Answer to the Statement of Claim Claimant’s counsel withdrew all claims with prejudice and dismissed the arbitration.

Winget, Spadafora & Schwartzberg, LLP and its Securities Practice Group are constantly focused on identifying new and insightful ways to defend claims in the securities industry to ensure our clients are getting the most cutting-edge defense strategies available.