We are finally seeing action taken to protect elderly investors from sharks in the financial services business who prey on them.
A Financial Industry Regulatory Authority panel awarded the elderly investor, David Wolfson, $1.6 million in a case involving StockCross Financial Services Inc. of Beverley Hills, Calif. Mr. Wolfson accused StockCross, along with two of its brokers, of misconduct and self dealing. He claimed the brokers recommended and solicited unsuitable and overly risky investments that were actively traded on margin.
The claim, which was filed in March, also alleged that StockCross and the two brokers, Thomas B. Cooper and Peter L. Boorn, put Mr. Wolfson’s home at risk. According to the complaint, they “encouraged and invited Mr. Wolfson to leverage the equity in his home with a reverse-mortgage transaction to utilize as investment capital.”
According to the complaint, Mr. Wolfson was a client of Mr. Cooper for almost 20 years, when Mr. Cooper dropped the account in 2008.
A footnote to the lawsuit alleged that Mr. Cooper “quit because he had bilked nearly all of Mr. Wolfson’s assets—including the equity in his home, all his cash reserves, all his emergency/medical cash reserves and even the insurance money Mr. Wolfson received to replace his automobile—and there was nothing left to churn.”
The arbitrators awarded Mr. Wolfson $320,000 in compensatory damages and $960,000 in damages for elder abuse. They also awarded the 95-year-old $234,000 in legal fees, expert witness fees of $62,000, various costs of $21,000 and $10,000 as sanctions for failing to follow discovery orders.
Sweet justice! Unfortunately too rare in the financial services industry.