Cases & Deals

Financial company executives obtain dismissal of arbitration claims relating to investments in auction-rate securities

Clients Financial company executives

Jones Day defended financial company executives in an arbitration alleging that the company and five former employees mismanaged its investment account, made various misrepresentations, were negligent, and breached contractual and fiduciary duties. The Claimant sought to recover over $7 million in compensatory damages resulting from the illiquidity it experienced from its ARS investments, plus punitive damages. Following its September 2008 bankruptcy, the claims against Lehman Brothers were stayed and those against the individual Respondents went forward. Following a nearly two-week evidentiary hearing in Philadelphia, the FINRA panel denied all of Claimant's claims, including its request for compensatory and punitive damages. The panel unanimously determined that the individual Respondents had acted properly, concluded that all of the claims were false, recommended expungement of all references to the arbitration from the registration records of the individual Respondents, and assessed all hearing costs against Claimant.

GSI Commerce Solutions, Inc. v. Lehman Brothers, Inc., et al., FINRA Arbitration No. 08-02857