Charles B. Davis, a former broker with Transamerica Financial Advisors Inc., was ordered by the Financial Industry Regulatory Authority Inc. (FINRA) arbitration panel to pay a former client $250,000 in punitive damages.
The punitive damages ordered by FINRA against Charles B. Davis, sends a message to brokers/financial advisers that they will be fined heavily for misconduct with their clients. It is rare that punitive damages are awarded by FINRA, even though compensatory damages are common. The behavior by the broker has to be deemed 'egregious' by the FINRA panel.
However, punitive damages to the customer are on the rise. In 2009, punitive damages awarded in client claims were $10 million. In 2010, damages were at $17 million and in 2011, $27 million according to FINRA.
In 2013 the awards reached $28 million.
In the case against Charles Davis, the allegations against Davis and Transamerica were breach of fiduciary duty, unsuitability, and fraud.
This was as a result from investments in Wolf Creek Land Company and Wolf Creek Land Company II, private real estate deals.
FINRA sent a loud message to the industry by awarding punitive damages in this amount.
If you sustained an investment loss due to your stock broker/financial advisor’s recommendations regarding REITs or other complex investments, call for a free consultation with an attorney on how to potentially recover your losses, call Soreide Law Group at 888-760-6552.
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