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Barsion v. A.G. Edwards & Son Award NASD Dispute Resolution, Inc.
In the Matter of the Arbitration Between: Names of the Claimants: Case Number: 01-01223 Cyril and Willena Burke, Individually and as Joint Tenants With Right of Survivorship, Cyril Burke as owner of the Cyril Burke Roth Rollover IRA, Willena Burke as owner of the Willena Burke Roth Rollover IRA and Albert Raoul Barsion, as Attorney-in-Fact for Albert Barsiou under Power of Attorney Dated 09/01/98 and as Successor Trustee of the Albert Barsion Trust U/A DTD 3-2-95 Names of the Respondents Hearing Site: Tampa, Florida A.G. Edwards & Sons, Inc. Paul R. Vogel, Jr. REPRESENTATION OF PARTIES For Cyril and Willena Burke, Individually and as Joint Tenants With Right of Survivorship, Cyril Burke as owner of the Cyril Burke Roth Rollover IRA, Willena Burke as owner of the Willena Burke Roth Rollover IRA (“Burke”) and Albert Barsion, as Attorney-in-Fact for Albert Barsion under Power of Attorney Dated 09/01/98 and as Successor Trustee of the Albert Barsion Trust U/A DTD 3-2-95 (“Barsion”), hereinafter collectively referred to as “Claimants”: Jeffrey P. Coleman, Esq., Coleman Law Firm, Clearwater, Florida. For Respondent A.G. Edwards & Sons, Inc. (“Edwards”) and Paul R. Vogel, Jr. (“Vogel”), hereinafter collectively referred to as “Respondents”: Nuviah Shirazi, Litigation Counsel, Edwards, St. Louis, Missouri. CASE INFORMATION Statement of Claim filed on or about: March 7, 2001. Amended Statement of Claim filed on or about: May 24, 2001. Claimant’s Response to Motion to Bifurcate filed on or about: June 7, 2001. Claimant’s Burke signed the Uniform Submission Agreement: January 23, 2001. Claimant Barsion signed the Uniform Submission Agreement: February 7, 2001 by Albert Barsion, Attorney-in-Fact. Respondents’ Statement of Answer in Response to Statement of Claim filed by Cyril and Willena Burke filed on or about: May 22, 2001. Respondents’ Statement of Answer in Response to Statement of Claim filed by Albert Barsion filed on or about: May 22, 2001. Motion to Bifurcate filed on or about: May 22, 2001. Respondent Edwards signed the Uniform Submission Agreement: May 22, 2001. Respondent Vogel signed the Uniform Submission Agreement: May 23, 2001. CASE SUMMARY Claimants asserted the following causes of action: violations of state securities law and common law of the state of Florida including Chapter 517, Florida Statutes; respondent superior and negligent supervision; negligence and gross negligence; breach of fiduciary duty; and, breach of contract/violation of industry standards. The causes of action relate to the Claimants’ large positions in and over concentration in their accounts of shares of Able Telecom Holding Corporation and American International Foods. Unless specifically admitted in their answers, Respondents denied the allegations made in the Statement of Claim and asserted various defenses. RELIEF REQUESTED Claimants requested the following in their Statement of Claim:
During the evidentiary hearing, Claimant Barsion reduced his compensatory damage request to $450,000.00 and requested a finding of entitlement to attorneys’ fees. Respondents requested that all claims be dismissed with prejudice and that Respondents be awarded all costs incurred in connection with this matter, reasonable attorneys’ fees, and such other relief deemed just and proper by the Arbitration Panel. OTHER ISSUES CONSIDERED AND DECIDED On or about September 21, 2001, the arbitration panel issued an order, which denied Respondents’ Motion to Bifurcate. At the evidentiary hearing, Claimants Burke informed the arbitration panel that they had dismissed, with prejudice, all claims against Respondents. AWARD After considering the pleadings, the testimony and evidence presented at the hearing, and the post-hearing submissions (if any), the Panel has decided in full and final resolution of the issues submitted for determination as follows: Respondent Vogel is found liable on the claims of unsuitability and broker’s negligence. Respondent Edwards if found liable on the claims of negligent supervision and vicarious liability. As such, Respondents are found liable, jointly and severally, and shall pay to Claimant Barsion the sum of $287,000.00 plus interest at the rate of 10% per annum from May 1, 2002 until the date of payment of the Award. Respondents are found liable, jointly and severally, and shall pay to Claimant Barsion his attorneys’ fees in an amount to be determined by a court of competent jurisdiction. Attorneys’ fees are awarded by operation of law and pursuant to the attorney’s fees provision on the account card. Respondents are found liable, jointly and severally, and shall pay to Claimant Barsion costs in the sum of $16,006.93, $11,000.00 of which represents witness fees. Respondents are found liable, jointly and severally, and shall pay to Claimant Barsion the sum of $375.00 representing reimbursement of the claim-filing fee previously paid by Claimants to NASD Dispute Resolution, Inc. Any and all relief not specifically addressed herein, including punitive damages, is denied. FEES Pursuant to the NASD Code of Arbitration Procedure (the “Code”), the following fees are assessed: Filing Fees NASD Dispute Resolution, Inc. will retain or collect the non-refundable filing fees for each claim:
Member Fees Member fees are assessed to each member firm that is a party in these proceedings or to the member firms(s) that employed the associated person(s) at the time of the event(s) giving rise to the dispute. Accordingly, Respondent Edwards is a party.
Adjournment Fees Adjournments granted during these proceedings for which fees were assessed:
Forum Fees and Assessments The Panel has assessed forum fees for each session conducted. A session is any meeting between the parties and the arbitrator(s), including a pre-hearing conference with the arbitrator(s), that lasts four (4) hours or less. Fees associated with these proceedings are:
Hearing Dates:
Total Forum Fees = $18,450.00 The Panel has assessed $9,225.00 of the forum fees to Respondent Edwards and Respondent Vogel shall be jointly and severally liable with Respondent Edwards for this amount. The Panel has assessed $9, 225.00 of the forum fees to Respondent Vogel and Respondent Edwards shall be jointly and severally liable with Respondent Vogel for this amount. Administrative Costs Administrative costs are expenses incurred due to a request by a party for special services beyond the normal administrative services. These include, but not limited to, additional copies of arbitrator awards, copies of audio transcripts, retrieval of documents from archives, interpreters, and security. There were no administrative costs incurred during these proceedings. Fee Summary Claimants be and herby are jointly and severally solely liable for:
Respondents Edwards be and hereby is solely liable for:
Respondents be and hereby are jointly and severally liable for:
All balances are payable to NASD Dispute Resolution, Inc. and are due upon receipt pursuant to Rule 10330(g) of the Code. ARBITRATION PANEL
Concurring Aribtrators’ Signatures ________________________________ ___________________ Lee C. Conser, Esq. Signature Date Public Arbitrator, Presiding Chairperson
________________________________ ___________________ Russell W. Merriman, Esq. Signature Date Public Arbitrator
________________________________ ___________________ Michael N. Gonatos Signature Date Non-Public Arbitrator
June 4, 2002Date of Service (For NASD Dispute Resolution office use only)
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