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RE: TAMPA NASD ARBITRATION PANEL AWARDS RETIRED PALM HARBOR HAIRDRESSER $158,571.00 FOR THE MISHANDLING OF HER BROKERAGE ACCOUNT.

Berhardine Timmerscheidt worked all her life as a hairdresser in Brooklyn, New York, never making more than $20,000.00 a year during her entire working life. Never married, she was thrilled to receive a modest inheritance from an aunt and uncle a few years before her planned retirement at the age of 62. With the exception of a very small IRA account, Ms. Timmerscheidt had never invested in the stock market.

Ms. Timmerscheidt knew she would need to supplement her small social security income, and when somebody recommended that Mr. Michael K. McNulty could help her, she set up an account with him. She told him that she needed income, “but don’t do anything to place my principal at risk.”

Ms. Timmerscheidt alleged, and the panel agreed, that Mr. McNulty handled the account in an improper manner. Instead of investing in high grade investments that would provide Ms. Timmerscheidt with the income she so very desperately needed, Mr. McNulty traded the account in an aggressive manner in order to generate large commissions for himself. In order to have more capital to trade, the broker Mr. McNulty engaged in the very risky act of buying and selling securities on margin. Margin is when securities are purchased on credit by a customer, and something that Ms. Timmerscheidt was not aware. Mr. McNulty even went so far as to deceive Ms. Timmerscheidt by providing her with “doctored” false account statements indicating that her account was still in good shape. The harsh truth came from her tax preparer who told her that she was nearly broke. She turned to local securities attorney Jeffrey P. Coleman of the Coleman Law Firm in Clearwater, Florida for help.

“It’s a very tough situation for Ms. Timmerscheidt.” said Coleman. “Thank goodness she has the support of her friends to get her through this.” “The panel found the broker liable for violations of Florida Statutes, Chapter 517, including churning, misrepresentations and omissions, as well as being subject to the right to pursue the collection of attorneys fees.”

Mr. McNulty was formerly employed with Weatherly Securities Corporation. Weatherly Securities Corporation had been named in the proceeding, but has ceased to do business. The firm is presently in SIPC Receivership. Their main headquarters had been located in the World Trade Center. SIPC stepped in to make sure Weatherly’s customers received the securities and cash on deposit, but it will do nothing for the losses incurred by Ms. Timmerscheidt.

“Overall, I believe there is a misconception about what SIPC actually does for investors.” said Coleman. “The SIPC emblem is displayed at the brokerage houses and sometimes on the business cards of their registered representatives. It gives the customer a feeling that their funds are protected. This is true if the cash or securities are stolen by the investment advisor. Unfortunately, this coverage does not include firm negligence or brokerage fraud. SIPC is designed to restore funds to investors with assets in the hands of bankrupt of otherwise financially troubled brokerage firms. SIPC takes the position that a number of federal, self-regulatory and state securities agencies deal with cases of investment fraud, and it was not chartered by Congress to combat fraud.”

I have attached a copy of the NASD award. If you have any questions, please feel free to contact Jeffrey P. Coleman, Esquire at the above address and/or telephone number.