A Financial Industry Regulatory Authority Arbitration Panel in the matter of Fahs v Merrill Lynch Pierce Fenner & Smith, Inc., FINRA-DR Arbitration No. 09-06623 awarded a Connecticut man one hundred percent (100%) of his net out-of-pocket compensatory losses, plus interest at the rate of 6% per annum over a period of approximately three years, together with attorney’s fees of $30,000.

The claim relates to the conduct of his former stock broker, Saly Ann Glassman, of the Blue Bell, Pennsylvania office of Merrill Lynch Pierce Fenner & Smith, Inc., and alleged, among other things, the misstatement and failure to disclose the risk associated with the recommendation of a third party investment manager, through the Merrill Lynch Consults Program, to manage Claimant’s investment accounts.

However, as is typical in FINRA Securities Arbitration Awards, the arbitration panel provided no explanation for their Award. FINRA Dispute Resolution reports that as of June 2011 only 48% of customer initiated investment related complaints are adjudicated in favor of the customer, and historically, in such cases, customers receive less than 60% of the actual losses sought through securities arbitration. This case is also significant because the securities arbitration panel also awarded interest at the rate of 6% per year, and also ordered Merrill Lynch to pay attorney’s fees in accordance with the Connecticut Uniform Securities Act, Sec. 36b-5, in the amount of $30,000.

The FINRA Securities Arbitration Panel, in its Award, also denied the request of Saly Ann Glassman to expunge, or remove this matter from FINRA records. Saly A. Glassman is a contributor to the Huffington Post, and is the author of several books, including “It’s About More Than the Money: Investment Wisdom for Building a Better Life.”

In 2006, Saly A. Glassman was featured in Barron’s as the top female financial advisor in the United States, and according to her website, she “has been listed consistently in the top third of Barron’s 100 Best Brokers. She is listed #1 in the 2008 Top 100 Woman Financial Advisors, and in 2009 a state by state ranking is listed #1 for the Commonwealth of Pennsylvania.” According to Merrill Lynch’s website, Saly Ann Glassman‘s “practice is ranked #1 in the Philadelphia Complex, and was ranked the 2nd largest practice in Merrill Lynch for 2009. She invests more than $1.5 billion for high net worth individuals, corporations, and institutions.”

Prior to May 18, 2009, broker-dealers were only required to report or disclose customer initiated, investment related FINRA securities arbitrations where the individual broker was named as a “party.” After May 18, 2009, broker-dealers are required to report customer initiated, investment related arbitrations involving the conduct of the individual broker, or are resolved or settled in excess of $15,000, irrespective of whether the individual broker contributes to any such settlement.

The Financial Industry Regulatory Authority (FINRA), Office of Dispute Resolution, (formerly NASD Dispute Resolution, Inc.) reports that as of 2003, of the 663,000 registered representatives in the country in 2003, only 2,751 or 0.41 % have been the subject of three or more customer initiated investment related complaints or arbitrations. In April 1997 and again in 2003, the New York Stock Exchange and FINRA (then the NASD) recommended that brokers subject to three or more complaints within a five year period ought to be placed upon heightened supervision. Securities regulators and the United States Securities and Exchange Commission also may recommend that a particular broker be placed on heightened supervision.

FINRA Public Disclosure Records for Saly Ann Glassman reflect the existence of ten reported customer initiated, investment related complaints or arbitration proceedings alleging sales practice violations, or other misconduct and allege damages in excess of $5,000. One should note that these are mere allegations and may reflect no actual wrongdoing by the broker, as one is encouraged to read the entire FINRA Public Disclosure Record including the Disclosure Section which states that “information about customer disputes, disciplinary events and financial matters on the broker’s record.” FINRA lists each incident as reported by securities regulators, the individual broker, and any involved firms. Please keep in mind that some of these items may involve pending actions or allegations that have not been resolved or proven. The presence of this information does not automatically indicate wrongdoing on the part of the broker.

Claimant was represented in this matter by Nicholas J. Guiliano, Esquire of the Guiliano Law Firm in Philadelphia. Respondent Merrill Lynch Pierce Fenner & Smith, Inc., was represented by William E. Mahoney, Jr., Esquire of Stradley Ronon, Stevens & Young, L.L.P., also in Philadelphia.

Guiliano Law Firm

The practice of Nicholas J. Guiliano, Esq., and The Guiliano Law Firm, P.C., is limited to the representation of investors in claims for fraud in connection with the sale of securities, the sale or recommendation of excessively risky or unsuitable securities, breach of fiduciary duty, and the failure to supervise. We accept representation on a contingent fee basis, meaning there is no cost to unless we make a recovery for you, and there is never any charge for a consultation or an evaluation of your claim. For more information contact us at (877) SEC-ATTY.

Comments are closed.