FINRA Panel Awards $3.1 Million Against Citigroup Broker
FINRA Arbitration Demonstrates that it Works
An arbitration panel of the Financial Industry Regulatory Authority (FINRA) awarded $3.1 million to Dr. Nasrideen Madhany, his wife Zeenat Madhany and their family trust for wrongful acts related to a series of real estate investments that went defunct.
The defendant was Citigroup and its former broker, Scott Andrew King (now at Wells Fargo).
The claim took longer to resolve than most– filed in the Winter of 2010, but involved a highly complicated web of interrelated issues. Plaintiffs were sold investments in some real estate firms actually owned by a lawyer: Moorings at Carrabelle, Inc., Moorings Development Inc., and Pirates Cove Marina LLC. In addition to making the investments, they co-signed loan guarantees of $12,000,000 for the developments–which eventually came due when the projects defaulted, and the Plaintiffs ended up liable for a portion of the $12 million loan plus interest due to judgment obtained in Wachovia Bank v. Robert C. Brooks et al.
The plaintiffs alleged breach of fiduciary duty, misrepresentations, breach of contract, negligence, fraud, and negligent supervision on the part of Citigroup. The plaintiffs claimed damages of $1,070,000, plus punitive damages and attorneys fees, and also sought indemity for the $12,000,000.
The panel duly awarded the plaintiffs $1,047,000 for their out of pocket losses, plus approximately $2.1 million for their share of the liability on the loan guarantee, and ordered Citigroup (CGMI) to indemnify them for any additional liabilities. (Read the award here).
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