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COMPLAINTANTS, WHO PURCHASED GMAC SMARTNOTES MORE THAN A YEAR AGO, WHICH HAVE SINCE BEEN DOWNGRADED, HAVE NOW ALLEGED THAT THEIR UNREALIZED INVESTMENT LOSSES ASSOCIATED WITH THIS INVESTMENT ARE THE RESULT OF INAPPROPRIATE INVESTMENT ADVICE
Damage Amount Requested
$295,496.99
Broker Comment
THE LETTER WRITTEN BY [FAMILY MEMBER] IS RIDDLED WITH MISSTATEMENTS AND UNTRUTHS. [FAMILY MEMBER] IS TRYING TO IMPLY THAT THE PURCHASE OF THE GMAC SMARTNOTES WAS MY RECOMMENDATION. THIS IS NOT TRUE. I HAD NEVER HEARD OF GMAC SMARTNOTES UNTIL [CUSTOMER] BROUGHT THEM TO MY ATTENTION. IT WAS [CUSTOMER] WHO WANTED TO MAKE THE INVESTMENT AND I TOOK THE ORDER FROM [CUSTOMER] ON AN UNSOLICITED BASIS. [FAMILY MEMBER] STATES IN HIS LETTER THAT I ADVISED [CUSTOMERS] ON THE INVESTMENT. THIS IS NOT TRUE. I ADVISED THEM TO HIRE A PROFESSIONAL MONEY MANAGER TO CONSTRUCT A PORTFOLIO OF HIGH YIELDING REIT INVESTMENTS. [CUSTOMER] TOLD ME HE'D RATHER INVEST IN THE GMAC PAPER. AS HE SAID, "IF SOMETHING HAPPENS TO GM WE HAVE BIGGER PROBLEMS THEN THESE BONDS." [FAMILY MEMBER] ALSO STATES THE BONDS ARE RISKY. WHEN [CUSTOMER] PLACED THE ORDER THE BONDS WERE A RATED. THE BONDS ALSO CARRY A DEATH PUT SO IF ONE OF THEM DIES THE BONDS ARE PAID OFF AT PAR. ANOTHER MATERIAL MISSTATEMENT THAT [FAMILY MEMBER] MAKES IS THAT 80% OF THE TRUST WAS INVESTED IN THESE BONDS. ACCOUNTS FOR THE TRUST ARE HELD AT A NUMBER OF DIFFERENT FIRMS AND I BELIEVE THE SIZE OF THE TRUST TO BE APPROXIMATELY $5 MILLION. [CUSTOMERS] ARE VERY SOPHISTICATED INVESTORS. THEY OWN RAILWAY CARS AND OWNED A COMPANY THAT TRADED SCRAP METAL. THEY WERE VERY AWARE OF MARKETS. I DID BUSINESS WITH THE BROTHERS FOR A COUPLE OF YEARS AND MOST OF THE TRADES WERE FOR $25,000 TO $50,000. WHY WOULD THEY THEN DO A TRADE FOR $1 MILLION? THE REASON THEY DID IT WAS IT WAS THEIR IDEA AND THEY WERE VERY COMFORTABLE WITH THE TRADE. THE PROBLEM AROSE WHEN THE KIDS GOT INVOLVED. [CUSTOMER] ONCE TOLD ME THAT HE LIKED TO BUY BONDS IN $500,000 INCREMENTS SO I REALLY DIDN'T GIVE IT MUCH THOUGHT WHEN THEY GAVE ME THE ORDER. [FAMILY MEMBER] IS JUST TRYING TO SHAKE DOWN LEHMAN BROTHERS. HE KNOWS AS WELL AS THE TWO [CUSTOMERS] THAT THE TRADE WAS UNSOLICITED.
WILLIAM H. METZ
11/7/2003
Customer Dispute
Denied
Allegations
COMPLAINANT ALLEGES THAT HE SUFFERED LOSSES AS A RESULT OF UNSUITABLE INVESTMENT ADVICE.
Damage Amount Requested
$1,257,645.00
9/2/2003
Customer Dispute
Settled
Allegations
CLAIMANTS' ALLEGE: UNSUITABLE INVESTMENT RECOMMENDATIONS, UNAUTHORIZED TRANSACTIONS, NEGLIGENT ACCOUNT MANAGEMENT, CHURNING AND EXCESSIVE TRADING, MISREPRESENTATIONS AND OMISSIONS, IN ADDITION TO ALLEGED VIOLATIONS OF VARIOUS STATE LAWS AND NYSE AND NASD RULES.
Damage Amount Requested
$2,587,036.00
Settlement Amount
$1,000,000.00
7/11/2003
Customer Dispute
Denied
Allegations
FORMER CLIENT WHO PURCHASED HIGH-YIELD/RISK CORPORATE BONDS IN MAY 2001 AND THEN TRANSFERRED HIS ACCOUNT FROM THE FIRM IN JANUARY 2002 (WHILE THE BOND POSITION WAS ESSENTIALLY FLAT), HAS NOW COMPLAINED (APPROXIMATELY 1 ½ YEARS AFTER TRANSFERRING THEM FROM THE FIRM) THAT THE RECOMMENDATION TO PURCHASE THE BONDS WAS UNSUITABLE.
Damage Amount Requested
$10,700.55
6/24/2003
Customer Dispute
Settled
Allegations
CLAIMANTS' ALLEGE: BREACH OF CONTRACT, CHURNING, UNAUTHORIZED TRADING, UNSUITABLE INVESTMENT RECOMMENDATIONS, FRAUD, BREACH OF FIDUCIARY DUTY, MISREPRESENTATION, IN ADDITION TO ALLEGED VIOLATIONS OF VARIOUS STATE AND FEDERAL SECURITIES LAWS AND NYSE AND NASD RULES
Damage Amount Requested
$214,962.02
Settlement Amount
$52,500.00
Broker Comment
RESPONDENT BROKER WAS DISMISSED FROM THE ARBITRATION ON 10/08/2004. THIS AMENDMENT IS BEING FILED TO REFLECT LEHMAN'S SETTLEMENT OF THE ARBITRATION ON 12/03/2004.
4/1/2002
Customer Dispute
Denied
Allegations
NOW, AFTER THE MARKETS HAVE REACHED RECORD LOWS, THE CUSTOMER HAS ALLEGED THAT UNAUTHORIZED TRADES HAVE BEEN EFFECTED IN HER ACCOUNT SINCE JANUARY 2000, THOUGH SHE HAS FAILED TO IDENTIFY ANY SPECIFC TRADES OR INVESTMENT ACTIVITY. WHILE THE CUSTOMER HAS NOT ALLEGED SPECIFIC DAMAGES WITH RESPECT TO HER ACCOUNT(S), IT IS ESTIMATED THAT HER CLAIM EXCEEDS MINIMUM FILING REQUIREMENTS.
Disclosures can be customer complaints or arbitrations, regulatory actions, employment terminations, bankruptcy filings and certain civil or criminal proceedings that they were a part of.
Disclosures can be customer complaints or arbitrations, regulatory actions, employment terminations, bankruptcy filings and certain civil or criminal proceedings that they were a part of.