Raymond James Financial Services Inc., has paid a $1.79 million arbitration award to an 87-year-old client after going to state court to appeal the judgment writes Darla Mercado, in a November 30, 2011, article for the InvestmentNews.com.

The Honorable Judge Emily Tobolowsky, of the 298th Judicial District Court in Dallas last month confirmed the award and denied the broker-dealer’s motion to vacate the payment, a move that few broker-dealers attempt to make.

The FINRA arbitration panel ordered Raymond James to pay some $1.7 million in May, plus interest, to elderly client Hurshel Tyler and the estate of his deceased wife, Mildred. The sum is thought to be the largest award ever against Raymond James.

Mercado writes that the Tylers, both in their late 80s when the case first went to arbitration, had some $3.5 million in bond funds. But they allegedly were encouraged by a former Raymond James broker, then based in Amarillo, Texas, to put the money into variable annuities and variable life insurance.

This variable life insurance policy was loaded down with $2 million in improper loans — along with continuing tax and interest obligations — that would have made it difficult to return the product to the broker-dealer, according to a transcript from a court hearing in September. “From a supervisory standpoint, the large loans taken out against the policy should have been red-flagged,” the Tylers’ attorney said in an interview with InvestmentNews. The couple had contended that the investments were unsuitable; an arbitration panel from the Financial Industry Regulatory Authority Inc. decided in their favor.

In appealing this decision, Raymond James claimed that the Tylers should have returned the annuities, which had grown by more than $958,000. Initially, the elderly couple had sought return of their money, but were instead awarded compensatory damages and were not instructed to return the annuities.

Raymond James had also argued that the $250,000 it was supposed to pay the Tylers in attorneys’ fees ought to be vacated because laws in Florida — where Raymond James is based — don’t allow for such awards.

The InvestmentNews.com article goes on to say that the attorney for the Tylers asserted that Raymond James never brought up that argument in the arbitration discussions in March this year, nor did it ever object to her presentation of the case under Texas law.

“Raymond James continues to believe that the award in this matter is a miscarriage of justice. The Tylers made a profit in excess of $800,000 during the period of time that the Tylers maintained accounts with Raymond James and suffered losses when they transferred their accounts to another broker-dealer,” said the director of litigation at Raymond James. He added,”Raymond James believes the panel erroneously held Raymond James responsible for those losses. Notwithstanding that fact, Raymond James has determined, after reviewing the anticipated time and resources necessary to continue to fight what we still believe to be an erroneous award, to put the matter behind us and move forward.”

Securities Attorney, Lars Soreide, of Soreide Law Group, PLLC, has represented clients nationwide. If you or a family member have experienced losses through Raymond James Financial Services, Inc., call a Securities Arbitration Lawyer for a free consultation on how to potentially recover your losses. To speak with an attorney, call 888-760-6552, or visit www.securitieslawyer.com.

Soreide Law Group, PLLC., representing investors nationwide before FINRA the Financial Industry Regulatory Authority.