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Kazma Citigroup Arbitration Award

Award FINRA Dispute Resolution

In the Matter of the Arbitration Between:

Names of the Claimants Case Number: 09-02697

Gerald J. Kazma Revocable Trust

Amzak Capital Management, LLC

Names of the Respondents Hearing Site: Boca Raton, Florida

Citigroup Global Markets, Inc. f/k/a Citicorp

Investment Services

Citigroup Alternative Investments, LLC

Nature of the Dispute: Customer vs. Member and Non-Member.

Representation of Parties

For Gerald J. Kazma Revocable Trust ("Kazma") and Amzak Capital Management, LLC ("ACM"), hereinafter collectively referred to as "Claimants": Robert Wayne Pearce, Esq., Robert Wayne Pearce, P.A., Boca Raton, Florida.

For Citigroup Global Markets, Inc. f/k/a Citicorp Investment Services ("CGM") and Citigroup Alternative Investments, LLC ("CAI"), hereinafter collectively referred to as "Respondents": Jason M. Fedo, Esq., Greenberg Traurig, P.A., West Palm Beach, Florida.

Case Information

Statement of Claim filed on or about: May 11, 2009.

Claimant Kazma signed the Submission Agreement: May 29, 2009.

Claimant ACM signed the Submission Agreement: May 29, 2009.

Statement of Answer filed by Respondents on or about: August 5, 2009.

Respondent CGM signed the Submission Agreement: June 18, 2009.

Respondent CAI signed the Submission Agreement: July 19, 2010.

Respondents' Motion for Remedial Action Based on Claimants' Spoliation of Evidence

("Motion for Remedial Action") filed on or about: July 1, 2010.

Case Summary

Claimants asserted the following causes of action: 1) breach of fiduciary duty; 2) common law fraud; 3) negligent misrepresentation; 4) negligent management; 5) negligent supervision; and, 6) breach of contract. The causes of action relate to the purchase in Claimants' accounts of ASTA Three Series 2006‑1 and ASTA Five Series 2007‑1A.

Unless specifically admitted in their Answer, Respondents denied the allegations made in the Statement of Claim and asserted various affirmative defenses.

Relief Requested

Claimants requested: 1) compensatory damages in excess of $4,000,000,00; 2) interest at the legal rate; 3) costs of this proceeding; 4) punitive damages; and, 5) such other relief as the undersigned arbitrators (the "Panel") deemed just and proper.

Respondents requested that the Statement of Claim be dismissed, with prejudice, and that the costs associated with this arbitration be assessed against Claimants.

Other Issues Considered and Decided

The arbitrators acknowledge that they have read the pleadings and other materials filed by the parties.

During the evidentiary hearing, the Panel heard argument on Respondents' Motion for Remedial Action. The Panel denied the motion.

During the evidentiary hearing and at the close of Claimants' case-in-chief, Respondents moved to dismiss the Statement of Claim on the grounds that Claimants failed to prove their case. Claimants opposed the motion. Following the argument of counsel, the Panel denied the motion.

The parties have agreed that the Award in this matter may be executed in coun1hrpart copies or that a handwritten, signed Award may be entered.


After considering the pleadings, the testimony and evidence presented at the hearing, the Panel has decided in full and final resolution of the issues submitted for determination as follows:

Respondents are liable, jointly and severally, for negligent management and negligent supervision and shall pay to Claimant Kazma compensatory damages in the sum of $908,648.00, pre-judgment interest specifically denied.

Respondents are liable, jointly and severally, for negligent management and negligent supervision and shall pay to Claimant ACM compensatory damages in the sum of $908,648,00, pre-judgment interest specifically denied.

Any and all claims for relief not specifically addressed herein, including Claimants' request for punitive damages, are denied.


Pursuant to the Code of Arbitration Procedure, the following fees are assessed:

Filing Fees

FINRA Dispute Resolution assessed a filing fee* for each claim:

initial claim filing fee = $1,800.00

*The filing fee is made up of a non-refundable and a refundable portion.

Member Fees

Member fees are assessed to each member firm that is a party in these proceedings or to the member firm(s) that employed the associated person(s) at the time of the events) giving rise to the dispute. Accordingly, as a party and member firm, Respondent CGM is assessed the following:

Member surcharge = $2,800.00

Pre-hearing process fee = $ 750.00

Hearing process fee = $5,000.00

Hearing Session Fees and Assessments

The Panel has assessed hearing session fees for each session conducted. A session is any meeting between the parties and the arbitrators, including a pre-hearing conference with the arbitrators, which lasts four (4) hours or less. Fees associated with these proceedings are:

One (1) Pre-hearing session with a single arbitrator @ $450.00/session = $ 450.00

Pre-hearing conference: June 2, 2010 1 session

One (1) Pre-hearing session with the Panel @ $1,200.00/session = $1,200.00

Pre-hearing conference: September 14, 2009 1 session

Eleven (11) Hearing sessions @ $1,200.00/session = $13,200.00

Hearing Dates: July 12, 2010 2 sessions

July 13, 2010 2 sessions

July 14, 2010 2 sessions

July 15, 2010 3 sessions

July 16, 2010 2 sessions

Total Hearing Session Fees = $14,850.00

The Panel has assessed $7,425.00 of the hearing session fees jointly and severally to Claimants.

The Panel has assessed $7,425.00 of the hearing session fees jointly and severally to Respondents.

All balances are payable to FINRA Dispute Resolution and are due upon receipt.

Arbitration Panel

Myron E. Levenson - Public Arbitrator, Presiding Chairperson

Joseph Benalt - Public Arbitrator

Donald R. McGahan - Non-Public Arbitrator

Concurring Arbitrators' Signatures


Myron E. Levenson Signature Date

Public Arbitrator, Presiding Chairperson


Joseph Benalt Signature Date

Public Arbitrator


Donald R. McGahan Signature Date

Non-Public Arbitrator

August 3, 2010

Date of Service (For FINRA Dispute Resolution use only)

Client Reviews
Robert Pearce is part of that unusual breed of lawyers that are able to create empathy with clients and thoroughly adopt their cause. No half efforts here. He and his group of professionals are outstanding strategists that can execute with precise fervor and unyielding determination. Theirs is a huge wave of facts, research, precedents and preparation, that has impressed me in its thoroughness and creativity, and most importantly with the results. No stone goes unturned and no effort is ever spared. In my book, he and they are those of a very rare kind that one wants to keep for a very long time. Ramon F.
This law firm is the real deal. We were so lucky that they took our case as they have so much experience in securities and all the wrongdoing that happens in these investment companies where they mislead you and your money (as in our case) into schemes that are not what you think they are. Mr. Robert Pearce is one of the best lawyers around, a truly professional who will fight for you and will tell you as it is all the time. Astrid M.
Mr. Pearce is a great professional and attorney. He led me through every step of the process in a clear, direct and straightforward manner. I highly recommend him as a securities attorney. Rey S.
Just like the song from HAMILTON, it's so nice to have Bob Pearce on your side. He is the consumate plaintiff's lawyer: smart. dedicated, fully able to try a case but a great negotiator in a mediation. He did a wonderful job for us, fully supporting us through the process and more than holding his own against a large national law firm. Maurice Z.
No lawyer except Bob said I had a chance of winning. When Ubs lawyers laughingly offered me zero to settle the dispute, Bob became even more determined to prove everybody wrong. Bob was extremely prepared, and always a step ahead of the opposing attorneys throughout the arbitration. In the end, Bob and I had the last laugh when the arbitrators awarded me almost 6 million dollars. J. Blanco