Elder Financial Fraud Victims – Punitive Damages
Silver Law Group, as a member of a legal team, represented a group of investors against two brokerage firms and its agent, Gary Gross. According to Financial Industry Regulatory Authority (FINRA) broker check, Gary Gross had a total of 48 customer complaints over his career. For the group of investors Silver Law Group represented, “Gross put elderly clients in unsuitable, risky investments, misled clients with doctored accounts of their investment holdings and needlessly traded securities in client portfolios to collect excessive fees and commissions.” For his work on this case, Scott L. Silver, an “AV” Preeminent Martindale Hubbell Peer Review Rating lawyer, he received the Daily Business Review’s Securities Litigator of the Year Award for 2009.
After the FINRA arbitration claim was filed, Gary Gross filed for Chapter 7 bankruptcy protection to shield himself from responsibility for his misconduct. In November 2008, almost a year later, the bankruptcy court denied the petition for bankruptcy and the FINRA arbitration panel re-opened the case. In the prosecution of the legal claims, the legal team filed claims for violation of Florida Statute Chapter 517 (securities transactions) against Gary Gross which according to the provision allows for Claimants’ recovery of reasonable attorney’s fees. Additionally, the legal team sought pre-judgment interest on the losses from the date they were sustained.
The arbitration claim sought damages for losses in highly speculative securities Gross recommended to Claimants’ including:
- Xenomics, Inc.;
- iCurie, Inc. n/k/a Celsia;
- Vistula Communications, Inc.;
- Central Lighting Co.;
- Innovative Oncology, n/k/a Avantogen Oncology, Inc.; and
- Bioaccelerate, n/k/a Gardant Pharmaceutical, Inc.
The Financial Industry Regulatory Authority (FINRA) arbitration claim alleged the following violations:
- Unsuitable Sale of Private Placements;
- Fraudulent Misrepresentations and Omissions of Material Facts;
- Unauthorized Trading;
- Unauthorized Use of Margin;
- Excessive Trading and “Churning”, and
- Failure to Supervise and Negligent Hiring.
In finding for the Claimants, the arbitration panel found that Gross, “had the intent to, and did harm Claimants by engaging in willful and wonton and fragrant disregard of the Claimants’ rights and property.” The damages sought in the arbitration claim were roughly $3.5 million. In addition, the FINRA arbitration panel awarded to Claimants punitive damages in excess of $4 million, for a total recovery of over $7.5 million. The FINRA arbitration award to Claimants included damages for attorney’s fees and pre-judgment interest.