Arbitrators for the Financial Industry Regulatory Authority have ruled in favor of a retiree who filed a complaint against Charles Schwab and RIA Pinnacle Associates, according to a report by Think Advisor.
The three-member arbitration panel issued its decision on behalf of Maria Fernbach, who said she suffered losses in her portfolio as the result of an options strategy that forced her to sell hundreds of shares of Apple stock. Under the FINRA award, Charles Schwab and Pinnacle were found jointly and severally liable and were ordered to pay Fernbach $436,110 in compensatory damages, interest on that sum at the rate of 9% a year from the date of the award through the date it is paid in full, $304,500 in attorneys’ fees, and $74,400 in other costs, for a total of $815,010.
In addition, Pinnacle was ordered to reimburse Charles Schwab for its portion of the award and to pay the firm $352,000 in attorneys’ fees.
The complaint by Fernbach about the laddered covered-call writing strategy was first filed in December 2020. In July 2021, she filed an amended complaint alleging fraud, omissions and misstatements, common law fraud, fraudulent inducement, breach of fiduciary duty, negligence, failure to supervise, breach of contract, breach of covenants of good faith and fair dealing, and violation of New York General Business Law Article 22-A. The claims were denied by both companies. Fernbach’s amended statement of claim had requested at least $908,982 in compensatory damages and unspecified punitive damages.
In a statement responding to the decision, a spokesperson for Charles Schwab was quoted as saying, “As always, we work to deliver exceptional experiences to all our clients and serve them as a trusted partner along their financial journeys.”
Hyman Cotter PC routinely represents investors nationwide who were harmed when financial professionals and their firms breached their fiduciary and other duties. Our team includes lawyers who have worked for large financial institutions, including Morgan Stanley and UBS Financial Services, and regulatory bodies such as the SEC. If you were the victim of a breach of fiduciary or other duties owed to you by a financial professional or financial firm, contact Hyman Cotter PC at 312-291-4600 or through our online contact form for a no-cost evaluation of your matter.
