As the warm, rosy hue of the holidays is fading, we are once again reminded of family. Ah yes, family! The aunts and uncles who don't talk to each other because of something that happened ten years ago but no one quite remembers exactly what. The cousins who you can't sit next to each other at the dinner table. The feuding siblings who manage to ruin every family get-together. The awkward silences brought on by the divorced folks who politely smile at each other through the entire meal for the sake of the kids but still get in a few shots. In today's BrokeAndBroker.com Blog we consider yet another family affair involving estranged kids and their father . . . their wealthy father . . . and a poor stockbroker who got caught in the middle. It ends well for the stockbroker but not without lots of festive nastiness for the holidays. In the holiday spirit, enjoy the three music videos.
Case In Point
In a Financial Industry Regulatory Authority ("FINRA") Arbitration Statement of Claim filed in August 2015, public customers Claimants asserted breaches of fiduciary duty and contract; negligence; and violation of NASD and FINRA rules in connection with private private placements and Real Estate Investment Trusts ("REITS"). Claimants sought $2.5 million compensatory damages, interest, costs, and attorneys' fees. In the Matter of the FINRA Arbitration Between Raoul Courville (now deceased), Laurence Courville, Jerome Courville, and Courville and Company, Claimants, vs. Ameriprise Financial Services, Inc. and ING Financial Partners, Inc., Respondents (FINRA Arbitration 15-02347, December 18, 2017).
Respondents Ameriprise and ING generally denied the allegations, asserted various affirmative defenses, and the expungement of the matter from the Central Registration Depository records ("CRD") of a non-party Donna DeSanctis.
As set forth in the FINRA Arbitration Decision:
Claimant Raoul Courville passed away in November 2015. Thereafter, Claimants Laurence Courville and Jerome Courville acted in their capacities as the Personal Representative of the Estate of Claimant Raoul Courville. Regarding Claimant Courville and Company, Claimant Laurence Courville acted in his capacity as Director and Secretary, and Claimant Jerome Courville acted in his capacity as Director, CEO and CFO.
On or about June 15, 2017, Claimants filed a notice of settlement of this matter and requested that the file remain open in order for the Panel to consider expungement. Therefore, the Panel made no determinations with respect to any of the claims asserted against either of the Respondents in the Statement of Claim
During the ensuing expungement telephonic hearing, neither Claimants nor Respondent ING participated or contested the request. The Panel noted that non-party DeSanctis did not financially contribute to the settlement
The Panel recommended the requested expungment of non-party DeSanctis's CRD based upon a FINRA Rule 2080 finding that the customers' allegations were factually impossible, clearly erroneous, and false. As set forth in pertinent part in the Panel's published rationale:
Notwithstanding Claimants allegations of unsuitability and failure to disclose material risks and relevant information to Claimants, as set forth in the Statement of Claim, non-party DeSanctis' testimony and the business records of both Respondent Ameriprise (Exhibit A-L) and Respondent ING (Exhibit 1-10) show that the now deceased Raoul Courville ("Claimant Courville") was a wealthy and sophisticated businessman who had a successful track record with real estate investments, including repeated investments in Real Estate Investment Trusts (REITs). His signatures and initials regarding detailed sections of documents is found throughout the records, confirming that he had a detailed understanding of his investments and that they were suitable for his investment objectives and risk tolerance.
Non-party DeSanctis and her husband lived in the same building with Claimant Courville in 1995 and became friends for a few years before Claimant Courville opened investment accounts with her at Respondent Ameriprise. They eventually learned that Claimant Courville was estranged from his son and daughter, who lived in France, and encouraged him to reconnect with his children. He eventually changed his mind, and in 2006, he opened investment accounts in each of their names. However, he managed the two children's accounts under his authority as their power of attorney. Non-party DeSanctis worked with Respondent Ameriprise from June 1991 to the present time, except for an interim period from 2007 to 2011, when she transferred to Respondent ING. When she left Respondent Ameriprise, she took all of the accounts to Respondent ING and brought them back when she returned to Ameriprise in 2011.
Non-party DeSanctis' social and successful business relationship with Claimant Courville continued uninterrupted until mid-2015, when his health rapidly declined due to a serious fall. Shortly thereafter, the children demanded information about Claimant Courville's affairs and tried to take over the accounts. Claimant Courville's condition was uncertain, the son and daughter were estranged from each other, and Respondent Ameriprise had questions regarding the children's authority over their fathers affairs. Through no fault of her own, non-party DeSanctis was sort of caught in the middle.
The children were later able to transfer the accounts to Raymond James, and then filed the claim in this case against Respondent Ameriprise and Respondent ING. The children had no involvement with management of the accounts until late 2015, when their father lost control of his affairs. Claimant Courville died in November 2015, without ever having made an oral or written complaint regarding the accounts. In non-party DeSanctis' last telephone contact with Claimant Courville, he asked her about the accounts. She said she couldn't discuss the matter with him, due to the claim that had been filed. He said he didn't understand what she was talking about. Claimant Courville had no knowledge of the filing of the claim. The claim was eventually settled as a business decision by Respondent Ameriprise and Respondent ING for a small fraction of the original $2,500,000 claim. . .
Bill Singer's Comment
- FINRA Rule 2080: Obtaining Customer Dispute Expungement
- FINRA Rule 2081: Prohibited Conditions Relating to Expungement of Customer Dispute
- FINRA Rules 12805 and 13805: Expunging Customer-Dispute Information Under Rule 2080