| April 5
April 5 U.S. securities arbitrators ordered a
former employee of Merrill Lynch, Deutsche Bank and Oppenheimer
& Co to pay nearly $11 million to an investor who alleged the
broker misrepresented securities and made excessive trades.
The investor's case against former broker Karl Hahn stems
from transactions involving covered calls, a variable annuity
and other investments, according to a ruling by a Financial
Industry Regulatory Authority (FINRA) arbitration panel.
The investor, Chase Bailey, filed the case in 2011, also
naming Bank of America Corp's Merrill Lynch unit,
Deutsche Bank Securities Inc, a unit of Deutsche Bank AG
and Oppenheimer & Co.
Hahn worked at the three firms consecutively for roughly
seven years between 2004 and 2011, according to his public
disclosure record. The case against Merrill was settled, while
those against Deutsche Bank and Oppenheimer were dismissed,
according to the ruling.
"Mr. Bailey is pleased with the award and hopes it serves as
a deterrent to future improper conduct," said Michael Perry, the
investor's Boston-based lawyer.
Hahn's alleged conduct toward Bailey, who is an internet
entrepreneur and now a New Hampshire-based filmmaker, occurred
while the broker worked at all three firms, Perry said.
Efforts by Reuters to reach Hahn for comment on Friday were
A Merrill spokesman declined to comment. A Deutsche Bank
spokeswoman said the firm terminated Hahn after becoming aware
of professional misconduct. A spokesman for Oppenheimer was not
immediately able to comment. Oppenheimer terminated Hahn in
2011, according to regulatory filings.
Arbitrators awarded the investor some $4.1 million in
compensatory damages and $6.4 million in punitive damages,
according to the ruling dated on Tuesday. Punitive damages
awards, aimed at deterring misconduct, are rare, say lawyers.
The decision is the second against Hahn in two months. FINRA
arbitrators, held Deutsche Bank and Hahn jointly responsible in
February in a $934,000 ruling on behalf of a couple and their
trusts, who alleged he swindled them in a multi million-dollar