This was a sad case of financial abuse by an ex-spouse of another taken to arbitration by Robert Pearce and Adam Kara of The Law Offices of Robert Wayne Pearce, P.A. (the “Pearce Law Firm”) for one of its clients. The Pearce Law Firm represented Elizabeth Snyder who filed claims against her ex-husband, Barry Snyder, for allegedly mismanaging her investment accounts through highly speculative, excessive and unsuitable trading strategy when he was employed as her stockbroker and later when he acted as her investment adviser at Glenwick Capital Holdings, LLC.
In the Spring of 2015, in breach of his fiduciary duties as an investment adviser, Mr. Snyder allegedly misrepresented that Mrs. Snyder needed to transfer almost all of the Snyder Trust to a new investment vehicle, Linkster Holdings, LLC, for estate planning purposes when Mr. Snyder was about to be fired and become unemployable in the securities industry and setting up a “family office” to avoid registration with the regulators. No one told Mrs. Snyder that he was fired and under investigation for misconduct even though he still continued to manage her accounts with the assistance of other employees at his former employer’s brokerage firm. Shortly after being terminated at that brokerage firm, Mr. Snyder caused Claimants’ accounts to be transferred to Montecito Advisors, Inc. and another brokerage firm where he allegedly crushed Mrs. Snyder financially through the same highly speculative, excessive and unsuitable at those brokerages. Within a few short months, Mrs. Snyder’s life savings were wiped out.
Mrs. Snyder alleged that Mr. Snyder’s actions were in contravention of his “fiduciary duty” to act in his investment advisory clients’ “best interest” and industry standards of conduct such as FINRA Rules of Conduct 2110, 2111 (f/k/a 2310), and 2120, which state:
2110. Standards of Commercial Honor and Principles of Trade
A member, in the conduct of its business, shall observe high standards of commercial honor and just and equitable principles of trade.
(a) A member or an associated person must have a reasonable basis to believe that a recommended transaction or investment strategy involving a security or securities is suitable for the customer, based on the information obtained through the reasonable diligence of the member or associated person to ascertain the customer’s investment profile. A customer’s investment profile includes, but is not limited to, the customer’s age, other investments, financial situation and needs, tax status, investment objectives, investment experience, investment time horizon, liquidity needs, risk tolerance, and any other information the customer may disclose to the member or associated person in connection with such recommendation.
* * *
2120. Use of Manipulative, Deceptive or Other Fraudulent Devices
No member shall effect any transaction in, or induce the purchase or sale of, any security by means of any manipulative, deceptive or other fraudulent device or contrivance.
* * *
Mr. Snyder’s recommendations and trading in Mrs. Snyder’s accounts were allegedly breaches of FINRA’s suitability rule, which has long been applied to recommended “investments” and “investment strategies.” Mr. Snyder allegedly misrepresented the “investments” and “investment strategies” to Mrs. Snyder as safe and suitable. The over-concentration, over-leverage, and excessive risks taken in the accounts were allegedly not fully disclosed to Mrs. Snyder until it was too late. Mr. Snyder’s acts and omissions not only allegedly violated his fiduciary duties, the FINRA standards of commercial honor and principles of trade, but also included the alleged use of manipulative, deceptive, and fraudulent devices and other FINRA Conduct Rule violations.
As we indicated above, Mr. Snyder lost every dollar in Mrs. Snyder’s accounts. She was forced to sell her home, jewelry, etc. to support herself and children after the suffering the investment losses. No law firm other than the Pearce Law Firm was willing to take the case on a contingency fee basis, and we did so, successfully!
The Pearce Law Firm sought an award of over $ 4,093,067 in market adjusted compensatory damages, or alternatively, $3,495,883 in net-out-of-pocket compensatory damages plus pre-judgment interest, attorney fees, expert witness fees, and costs. The arbitration award indicates the Panel was apprised of the amounts of settlements with other Respondents and requested to deduct those amounts from the compensatory damages before the award was entered. The Panel then entered an Award of $2,554,896 in compensatory damages but denied Claimants request for prejudgment interest, attorney fees, expenses, etc.
Free Initial Consultation With Securities, Commodities and Investment Dispute Lawyers Serving Investors Nationwide
If you have had your accounts mismanaged by Barry Snyder or any other stockbroker, investment adviser and/or trustee, and heard similar misrepresentations, received unsuitable recommendations, please call our office. The Law Offices of Robert Wayne Pearce, P.A. understands what is at stake in securities and commodities law matters and investment disputes, and works tirelessly to secure the best possible result for you and your case. Mr. Pearce provides a complete case review, identifies the strengths and weaknesses of your case, and fully explains all of your legal options. The entire law firm works to ensure that you completely understand the ins and outs of the legal process to give you complete peace of mind knowing that you have chosen the best possible representation for your case.