FINRA Ponzi Case: Divide and Conquer

April 5, 2010

In the Matter of the Arbitration Between Dale Z. Jablonski, Individually and as Trustee of the Jablonski Trust F/B/O Dale Jablonski and Mary L. Jablonski, Individually and as Trustee of the Bujack Trust F/B/O Mary Jablonski, Claimants, vs. Transamerica Financial Advisors, Inc.,and Michael Czerny, Respondents (FINRA Arbitration 09-00728, March 22, 2010). 


Ponzi Scheme


Claimants alleged that Respondent Czerny induced them to invest in several loan agreements with Golden Summit Group and Gregory Gibbs under the assurance that such loans were safe and that their investment would be personally guaranteed by Mr. Gibbs, even if Mr. Gibbs lost money trading on their behalf. Claimants state that their investments were used as part of a Ponzi scheme.  Claimants further alleged Respondent Transamerica failed to properly supervise Respondent Czerny and, as a result, the Respondents are liable for their actions and any losses incurred by Claimants. Claimants assert that even with the assistances of a Receiver, that they were only able to obgtain a refund of 25% of their investment.  Claimants sought $202,500 in compensatory damages.


No, No, and No


Respondents generally denied the allegations and Respondent Transamerica asserted a number of affirmative defenses including  that Claimants failed to state any cause of action, and did not rely to their detriment on any act, statement, or omission by Transamerica.  Further, Transamerica claimed that Claimants were not customers of Transamerica and the company owed no duty to them.  To the extent that Claimants' claims are based on the conduct of Respondent Czerny, Respondent Transamerica alleged that such conduct occurred, if at all, outside the course and scope of his authority as an independent contractor.  Accordingly, Claimants cannot hold Transamerica liable based on Czerny's alleged conduct.  Also, Claimants' losses, if any, were proximately caused by their own decisions, conduct, and/or negligence, and not by any actions or inaction by Transamerica.  Respondent Transamerica alleged that Claimants were fully advised of and understood the nature of the investments they purchased.  Finally, Claimant's claims are barred by statutes of limitations, repose and/or laches.


One Down


On or about November 3, 2009, Claimant notified FINRA Dispute Resolution that they had settled their claims against Respondent Transamerica Financial Advisors, Inc. and as a result dismissed all claims asserted against Transamerica Financial Advisors, Inc. with prejudice.


And The Winner Is . . .


The FINRA Arbitration Panel found Respondent Czerny liable and awarded to Claimants $150,000 in compensatory damages.


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