Legal Question in Business Law in California

Broker churns 88 year old women's investment account

I believe I have a case against one of the large brokerage house and would like to discuss the merits of the case with an attorney.

Basically:

- Inappropriate trading for Trust account (Trust account for 88 year old woman)

- Too high an investment risk taken

- Broker and Brokerage House did not abide by the terms of the trust in their trading

- Brokerage House apparently did not have alerts/warnings in place for trading and/or high margin ($300,000 margin balances)

- Excessive churning by broker, annual Looper ratio of 8.64

- Broker received paperwork to change from commission to fee base but failed to file, resulting in $18,000 worth of commissions.

Do we have a case for legal action?


Asked on 10/06/00, 8:31 pm

1 Answer from Attorneys
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Re: Broker churns 88 year old women's investment account

The facts you recite do indeed add up to a case for breach of fiduciary duty and other sanctionable behavior.

What kind of trust arrangement is involved? Was the broker the trustee? What are the key terms of the declaration of trust?

Many broker-client agreements call for mandatory arbitration under rules that tend to favor the brokers. Sometimes these agreements can be set aside to the advantage of the client, especially where the broker's behavior is particularly outrageous.

If you are in my part of the state, I would be willing to give you an initial free consultation to go over the situation and appraise the potential for recovering some of the losses.

My phone is (707) 523-4497 and e-mail is [email protected].

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Answered on 11/03/00, 5:06 pm


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