New York Securities Lawyer Blog
On or about May 24, 2012, Laverne B. Coalson, Individually, and Douglas L. Coalson and Gloria F. Coalson, as Trustees of the Coalson Insurance Trust U/A Dated 7/9/99 (“Claimants”) filed an arbitration before the Financial Industry Regulatory Authority, Inc. (“FINRA”) against Merrill Lynch, Pierce, Fenner & Smith Incorporated (“Merrill Lynch”) and their broker, Donny D. Vogler (“Vogler”). Claimants’ statement of claim alleged the following causes of action: deceptive insurance practices; deceptive trade practices under the Texas Deceptive Trade Practices-Consumer Protect Act; violation of the Texas Securities Act; negligent misrepresentation; breach of contract and implied covenant of good faith and fair dealing; negligent supervision; control person liability; and respondeat superior. The causes of action related to Claimants’ allegation that Respondents recommended inappropriate investments as part of their estate plan, including a variable universal life insurance product known as the “Merrill Lynch Funds Estate Investor II,” which Claimants asserted was unsuitable for their investment goals. Respondents denied the allegations made in the Statement of Claim and asserted affirmative defenses. After nine hearing sessions, the Panel determined that Merrill Lynch was liable to Claimants for compensatory damages in the amount of $957,485.50, plus interest. Further, the Panel found Merrill Lynch liable for $78,228.93 as sales load disgorgement, plus interest. Merrill Lynch also was ordered to pay Claimants $17,698.38 in costs; $23,950.00 in expert witness fees; and $120,474.40 in Attorneys’ fees pursuant to Texas law. Claimants’ claims against Vogler were denied and dismissed with prejudice, but his request for expungement was denied.
Lax & Neville LLP has nationally represented small broker-dealers, financial services professionals and securities industry companies in regulatory matters and securities-related and commercial litigation. Additionally, Lax & Neville has extensive experience in successfully prosecuting claims on behalf of customers who have suffered losses, including losses in variable universal life insurance products. Lax & Neville also has extensive experience in successfully prosecuting claims against Merrill Lynch. Please contact our team of attorneys for a consultation at (212) 696-1999.