Small business owner awarded $651,201 for losses, $329,664 in attorneys’ fees, and $1,000,000 in punitive damages (NASD, 1997)
The firm’s client was a small business owner from Louisiana who alleged that his stockbroker fraudulently induced him to invest in two private companies. After the client lost his entire investment in both companies, Brian Smiley represented Mr. Dobison in an arbitration claim against the stockbroker and his brokerage firm. The client contended that the individual broker and his firm were liable for negligence, fraud, conversion, breach of fiduciary duty, and the sale of unregistered securities. The brokerage firm contended that it was not liable because the broker had not made it aware of the transactions and did not place the investments through the firm. A hearing panel of the NASD entered an award on behalf of the client in the amount of approximately $2,000,000. More specifically, the panel ordered both the firm and the broker to pay Mr. Dobison $651,201 for his losses, plus $329,664 for attorneys’ fees and costs. In addition, the panel ordered the broker to pay another $1,000,000 in punitive damages. The award drew national attention, including a Wall Street Journal article (March 13, 1997), “Josephthal Lyon and a Former Broker Are Ordered to Pay Almost $2 Million.”
