Case Note: Clarity and Damages Analysis in a FINRA Arbitration

The Situation

A family of investors brought claims arising out of highly unsuitable investment advice provided by a broker at a national investment firm. Over more than a decade, the broker’s recommendations affected roughly a dozen accounts held by different family members across two generations. The losses were substantial, reaching into the tens of millions of dollars.

While liability was relatively clear, damages were not. The number of accounts, account holders, time periods, and transactions created an opportunity for confusion and for the firm to minimize apparent losses through selective accounting.

The Strategy

I served as second chair in a FINRA arbitration, working closely with lead counsel and the damages expert. Early on, it became clear that the core dispute would not be whether the advice was unsuitable, but how the losses should be calculated and presented.

We developed a comprehensive spreadsheet that tracked every dollar across all accounts over the relevant time period. The goal was not simply to total losses, but to present a coherent, transparent picture that reflected how the advice functioned across the family as a whole, rather than allowing the accounts to be fragmented and recharacterized in isolation.

When the investment firm attempted to argue that losses were far lower than they appeared based on selective time frames and incomplete aggregation, we were prepared. Using the underlying data, we demonstrated how the firm’s accounting methodology distorted the true financial impact.

My prior experience as a licensed financial advisor at a large international bank was particularly relevant in this process. That background helped identify inconsistencies in the firm’s approach, assess the assumptions underlying its calculations, and collaborate effectively with the expert to translate complex account data into an accurate damages analysis.

This was one of several contested issues in a hard-fought arbitration, but it proved to be a critical one.

The Outcome

Confronted with a clear and defensible damages analysis, the firm’s position became increasingly difficult to sustain. The case ultimately resolved through settlement on terms that satisfied the clients.

The Takeaway

In complex investment disputes, damages are often where cases are won or lost. When multiple accounts and long time horizons are involved, precision matters. Clear, defensible accounting can cut through complexity and prevent misleading narratives from taking hold.

Advisory Note

In arbitration and litigation alike, expert analysis is only as effective as its presentation. Careful collaboration between counsel and experts—and familiarity with how financial products operate in practice—can make a decisive difference.