Securities Arbitration: New Hope for Defrauded Retirees


Two recent awards in retirement securities arbitrations are bringing hope to retirees who have disputes with brokerage firms that gambled away their retirement funds. The first, in the case of Cain v. Securities America, concerns a retiree whose hard-earned savings were liquidated in favor of more aggressive investments. After an extensive arbitration process, the petitioner was awarded nearly $4 million in compensatory damages, another $3 million in punitive damages designed to punish the securities companies, and nearly $2.5 million to offset legal fees and costs.

The second case, May v. Intersecurities, Inc., involved IRA rollover accounts that were placed into high-variable annuities that proved risky, unsuitable to the retiree’s objectives, and ultimately worthless, producing no investment income whatsoever and losing the funds that had been promised to sustain the petitioner throughout retirement. May was eventually awarded nearly $1.7 million in compensatory damages and half a million dollars in punitive damages.

The high awards in these cases are very encouraging for retirees who have been defrauded, and the punishment definitely fits the crime since the stress and fear that comes along with such an egregious breach of trust and loss of hard-earned money is almost impossible to express. While arbitration is no easy road (it can be complex, lengthy, and costly), it is sometimes the only avenue available to defrauded retirees who agreed to resolution by arbitration in their initial paperwork with their brokerage firm. Arbitration has its own procedures, norms, and culture and it is of the utmost importance to find an attorney who is familiar with the process and has a good track record both in court and in arbitration.

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