Major Anthony Nelson Rubs Lamp and Gets His Wish: Over $11 Million Arbitration Victory!

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In a FINRA Arbitration Statement of Claim filed in May 2009, Claimants asserted causes of action including breach of fiduciary duty; breach of written contract; fraud; failure to supervise; and violations of federal and state securities laws, statutory and common law, and NASD rules of fair practice and NYSE rules. Although the FINRA decision does not detail the specific securities at issue, we are advised that the allegations involve the purchase of a life insurance policy. At the conclusion of the FINRA hearing, Claimants sought $1,345,015.00 in compensatory damages plus interest, costs, fees, and punitive damages in an amount to be determined. In the Matter of the Arbitration Between Larry Hagman, Individually; Larry Hagman & Maj I. Hagman Rev Trust; Larry Hagman & Maj I. Hagman, TTEE; Larry Hagman IRA CGM IRA Custodian; Larry Hagman Rollover IRA CGM; and  The Hagman Insurance Trust UAD 03/21/06, Claimants, vs. Citigroup Global Markets, Inc., Respondent (FINRA Arbitration  09-03251, October 6, 2010).

Respondent Citigroup generally denied the allegations and also requested the expungement of all references to the above captioned arbitration from non-party Lisa De Tanna's registration records maintained by the Central Registration Depository ("CRD").

FINRA Panel Orders Payment of Damages

The FINRA Arbitration Panel found Respondent Citigroup liable ordered it to pay to Claimants

$1.098,386.00 in compensatory damages; and$10,000,000 in punitive damages to be paid directly to the IRS Tax- Exempt 501c(3) charitable organization(s) of Claimants' choice, as permitted in accordance with:
Mastrobuono V. Shearson Lehman Hutton. Inc.. 514 U.S. 52 (1995 at http://www.law.cornell.edu/supct/html/94-18.ZO.html); Hobbs V. Bateman. Eichler. Hill Richards. 164 Cal. App. 3d (Cal. App. 2d Dist. 1985) at http://scholar.google.com/scholar_case?case=46826640791542154&hl=en&as_sdt=2&as_vis=1&oi=scholarr; California Welfare & Institutions Code § 15600, et seq.; and FINRA Arbitrator's Manual, pg. 31:

[a] party also might have requested punitive damages. Punitive damages are not intended to right a wrong but are intended to punish the wrongdoer and to deter future wrongdoing. Generally, you may award punitive damages if the claimant requests it, and the respondent has engaged in serious misconduct that meets the standards for such an award, as well as any arbitration forum rules on the subject.

The FINRA Panel found Respondent Citigroup liable for and ordered it to pay Claimants'

$439,354.40 in attorneys' fees, and $20,387.00 in costs, including fees of witnesses.

The FINRA Panel denied Respondent's request for the expungement of all references to the above captioned arbitration from non-party Lisa De Tanna's registration records maintained by the Central Registration Depository ("CRD")

Bill Singer's Comment:  Claimant Larry Hagman is, indeed, the actor who played the roles of  Major Anthony Nelson in the TV show “I Dream of Jeannie” and J.R. Ewing in “Dallas.”  See these clips: http://www.youtube.com/watch?v=Hrt0dqF_yqU

 

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