Raymond James Ordered to Pay Elderly Clients $1.8M After Losing Appeal

by Wall Street Fraud on December 22, 2011

elder fraud attorneyRaymond James Financial Services Inc. has been ordered to pay $1.8 million to a defrauded elderly Texas man and his now-deceased wife’s estate, after appealing the judgment in state court. Judge Emily Tobolowsky of the 298th Judicial District Court in Dallas confirmed the award and denied the broker-dealer's motion to vacate the payment.

As we noted in a previous blog post about this case, Hurshel and Mildred Tyler filed an arbitration claim against Raymond James in 2010, accusing the firm’s Texas branch of fraud, concealment and selling them unsuitable products in a scheme involving insurance, loans, and variable annuities.

In a May 10 ruling, a Financial Industry Regulatory Authority (FINRA) arbitration panel found that Raymond James failed to properly supervise Paul Davis as he sold the elderly couple life insurance and variable annuity products.

Davis apparently sold the clients’ $3.8 million portfolio, which had been heavily invested in municipal bonds, and bought the annuities and life insurance products. At some point between 2002 and 2006, the broker exchanged one annuity for another.

“That is a huge red flag, because usually it does not make economic sense,” stated the Tylers’ attorney. “It incurred substantial penalties, and that is what in large part made the transaction unsuitable.”

Davis also leveraged the insurance policy to make other annuity purchases, which also made very little sense. Long after the accounts were closed, the Tylers were saddled with $2 million in outstanding loans on the insurance policy.

As we noted before, this case highlights the importance of researching the suitability of all annuity products before investing, particularly for those who are retired or approaching retirement.

Source: Investment News

If you have been sold an unsuitable annuity, we may be able to help you recover your losses. Contact us today at 215-839-3953 for a free consultation.

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If you have been the victim of stock brokerage fraud, securities fraud, mutual fund fraud, stockbroker fraud, annuities fraud, or any other type of investment fraud, please contact us today for a free case evaluation. Our talented and aggressive legal and professional staff is eager to help you recover your losses.


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