NEW YORK, June 25 A former financial planner,
who is serving an eight-year prison sentence for stealing from
clients, has been ordered to pay Charles Schwab Corp
$2.75 million by an arbitration panel.
The case began with a claim against Schwab brought by the
father-in-law of Matthew Weitzman, the imprisoned adviser who
was a former principal at AFW Asset Management in the New York
City suburb of Purchase, NY.
Burton Langer, the father-in-law, accused Schwab of
unauthorized transfers of securities, and requested damages of
$8.4 million plus interest and attorneys' fees from the firm as
well as from the Weitzmans, as third-party respondents in the
arbitration claim. Schwab has a large business acting as
custodian of accounts for independent registered investment
A Financial Industry Regulatory Authority arbitration panel
instead ordered Matthew Weitzman to pay Schwab compensatory
damages of $2.75 million plus interest of 9 percent a day until
the award is paid in full.
Schwab, in a counterclaim, had requested an award from
Langer equal to whatever it might be found liable for, and also
requested a similar sum from Weitzman and three times the sum
from his daughter Susan Weitzman. It also asserted breach of
contract and aiding and abetting by Langer.
As is customary, FINRA arbitrators did not give reasons for
The arbitration panel, which signed the decision on June 18,
said Weitzman has not filed the proper arbitration dispute
papers but "is bound by the determination of the panel on all
It said that it made no determination about Langer's claims
against Susan Weitzman because a New York County court in
December 2010 stayed the arbitration against her.
An attorney representing Langer declined to comment on the
decision, while a lawyer for Susan Weitzman could not be
A spokesman for Schwab said he could not comment on the
award nor on the likelihood of being able to collect from the
When Matthew Weitzman was sentenced in early 2010, his
lawyer Marc Mukasey expressed disappointment with the length of
the 97-month sentence, saying his client's efforts to repay $7.1
million to his victims was "laudable and deserving of credit."
Mukasey, a partner at Bracewell & Giuliani in New York, said
Tuesday evening that he no longer represents Weitzman and
declined to comment on any aspect of the arbitration award.
Dow Jones reported on the FINRA award earlier on Tuesday.