FINRA Arbitration Panel Orders Fidelity to Pay $1.3 Million Over Structured Product Disputes
From the desk of Jim Eccleston at 蘑菇传媒
A Financial Industry Regulatory (FINRA) arbitration panel has ordered Fidelity Brokerage Services to pay approximately $1.3 million to two groups of clients who alleged misconduct tied to structured product investments, according to ThinkAdvisor.
The panel found Fidelity liable for nearly $1.29 million in compensatory damages and about $19,000 in fees. One investor will receive nearly $843,000, while another group will recover $445,246. As ThinkAdvisor reports, the claims arose from investments in structured products and included allegations of negligence, breach of contract, breach of fiduciary duty, and violations of securities industry rules and regulations.
The investors asserted that Fidelity failed to meet its obligations in recommending and managing these investments. Fidelity denied the allegations, according to the arbitration decision cited by ThinkAdvisor.
Structured products often tie performance to underlying assets and aim to achieve specific investment outcomes. These products may offer limited downside protection but frequently carry significant risk, particularly when concentrated in customer accounts.
In a separate matter, FINRA arbitrators also ordered Fidelity to restore $9,873 to a customer's IRA following a hacking incident. As ThinkAdvisor reports, the customer notified the firm that an unauthorized party accessed the account and removed funds. The investors alleged that Fidelity refused to return the stolen money and related federal withholdings despite timely notice.
The arbitration panel found no evidence that the customer authorized third party access to the account. The decision noted that Fidelity declined to reimburse the client even after repeated requests.
Fidelity defended itself against both matters, according to ThinkAdvisor.
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Tags: eccleston, eccleston law, finra arbitration, structured products, broker misconduct, securities litigation, fidelity brokerage services
