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Millions Paid to Investors in FINRA Settlements

Saturday, June, 13, 2015

Two recent FINRA rulings have resulted in millions of dollars in awards to investors who reported stockbroker fraud or details of unsuitable investments. The rulings included cases against Goldman Sachs and UBS.


The Wall Street Journal recently reported a FINRA panel awarded a Puerto Rican man $1 million for reporting UBS brokers recommended closed-end bond funds, considered unsuitable for a retired investor of 66.  The investor lost approximately $735,000 based on the recommendation and claimed he expressed concern over the losses, but was reassured by the UBS broker that if she’d had the money to invest she’d do the same. UBS disagrees with the $1 million award and FINRA’s assessment that the investors account was “grossly over-concentrated.”


Goldman Sachs to Pay National Australia Bank


Goldman Sachs is also on the hook for $100 million to be paid to National Australia Bank following an arbitration ruling. The broker encouraged National Australia Bank to invest in Hudson Mezzanine Funding on false pretenses. FINRA agreed with National Australia Bank that important details were left out of the marketing material that encourage the bank to invest $80 million. The additional $20 million in the award accounts for interest lost due to the investment.


FINRA is encouraging other investors to come forward if they believe they have been misled with by marketing materials or if they believe their accounts are too highly concentrated with one particular type of investment. Awards are being given to whistleblowers who report fraudulent activity or anything that gives the appearance that a broker is taking advantage of an investor.