Articles Posted in Case Announcements

Yesterday, a Financial Industry Regulatory Authority (FINRA) arbitration panel in Boca Raton, Florida awarded Malecki Law attorneys $397,823.00 for principal investment losses against Morgan Stanley & Co., LLC.  Malecki Law brought the case on behalf of an elderly and retired couple with conservative investment objectives on claims that Morgan Stanley failed to supervise their accounts and unsuitably over-concentrated their portfolio in risky oil and gas master limited partnerships (MLPs).  In addition to the compensatory damages, the panel also ordered Morgan Stanley to pay the claimants in this case 9% in interest, $15,000.00 in costs, attorneys’ fees, $11,812.50 in forum fees, and a $20,000.00 penalty for the firm’s late production of relevant documents at and just prior to hearing.

Malecki Law regularly brings claims on behalf of investors against unscrupulous conduct by brokers and brokerage firms, and holds them accountable for mismanaging investor retirement accounts.  Elderly investors such as these find themselves especially at risk from poor investment recommendations made by brokers and securities firms because senior citizens are typically out of the workforce and have much less time and ability to recoup their losses than younger investors.  This is pertinent to yesterday’s win because, in setting the damages figure, the arbitration panel rightfully did not deduct investment income (i.e., dividends), which the claimants earned while they had their accounts open with Morgan Stanley.

This is also a notable win for Malecki Law because the case involved the purchase of MLPs, which is a “hot investment” on Wall Street these days.  MLPs offer high yields, but are generally recognized as risky and volatile investments, typically within the oil and energy sector, and are not suitable for most retirement accounts or conservative investors looking to preserve their capital.  In May of last year, the Securities and Exchange Commission (SEC) issued an investor alert on MLPs to warn investors of the significant risks in these products, including unexpected tax consequences, fluctuations in distributions, and concentration exposure in the energy sector with acute sensitivity to shifts in the prices of oil and gas.

778488_stone_judgeMalecki Law is pleased to announce that we recently obtained Summary Judgment dismissal on behalf of a well-known Chinese inventor, who was a Defendant in the case that was pending in the Commercial Division of New York Supreme Court in New York County.  Our client was sued by hedge fund Abax Lotus Ltd. over speculative investments Abax made more than eight years ago in a company called China Mobile Media Technology, Inc.  The Inventor was a shareholder in China Mobile Media.  Abax has filed a notice of its intention to appeal the decision, which both dismissed Abax’s motion for judgment, and granted the Inventor’s motion dismissing all claims against him.

Our client was personally named in the New York State lawsuit, alongside the company he worked for, over Abax’s investment.  Abax previously obtained a judgment against the company, but sought to hold the Defendant personally liable.  Justice O. Peter Sherwood, ruling from the bench, correctly noted that the Defendant-Inventor’s agreement as a shareholder did not make him personally liable for the company’s failures.

Correctly citing the seminal New York Court of Appeals case Hooper Assocs. v. AGS Computers, Inc., Justice Sherwood determined that the indemnification provisions relied on by Abax for the Defendant’s supposed liability did not apply.  Justice Sherwood went further, determining that Abax “[did not] have the goods” to establish their claim against the Defendant.