May 3, 2011
In a Financial Industry Regulatory Authority ("FINRA") Arbitration Statement of Claim filed in March 2010, the Claimants sought at least $1.5 million in compensatory damages, disgorgement of commissions and advisory fees, reimbursement of fees and costs associated with the contested purchases, punitive damages, attorneys' fee, interest, and other costs/expenses in connection with various causes of action including negligence, fraud, and unsuitability in connection with losses that were sustained through investments in:
- the Mount Yale Large Cap Growth Fund;
- the Mount Yale Large Cap Value Qualified Fund;
- the Mount Yale Mid Cap Growth Qualified Fund;
- the Mount Yale Small Cap Qualified Fund;
- Johnston Asset Management International Equity Fund;
- Kinetics Advisers Institutional Partners; and
- the Rye Select Broad Market Fund (purportedly one of the largest "feeder funds" for Bernard L. Madoff Investment Services, LLC).
Respondents generally denied the allegations and asserted various affirmative defenses. In the Matter of the Arbitration Between Andrew and Blenda Wright as Trustees of the Wright Family Living Tmst, Claimants, vs. John Marshall, Roilance Verkennis, and Lincoln Financial Advisors Corporation, Respondents (FINRA Arbitration 10-01192 April 27, 2011).
The FINRA Arbitration Panel found
- Respondents are jointly and severally liable for and ordered them to pay to Claimant:
- $1,170,500.00 in compensatory damages with interest at the rate of 10% per annum from the date of the award until the award is paid in full.
- Respondent Lincoln Financial is solely liable for and ordered to pay to Claimant:
- $590,000.00 on compensatory damages in the amount of with interest at the rate of 10% per annum from the date of the award until the award is paid in full; and
- $600.00 to reimburse Claimant for the non-refundable portion of Claimant's initial claim filing fee.