Representative Cases


Federal_Building_and_U.S._Courthouse,_Milwaukee,_WI_Aug_03Securities Litigation and Arbitration covers a variety of disputes involving securities and the securities industry that are resolved via court litigation or arbitration (typically through the Financial Industry Regulatory Authority – “FINRA” – the self regulatory body for the securities industry). These disputes include both customer claims (individual and institutional investors) against their broker or broker-dealer (the securities firm), or disputes between the brokers themselves and the broker-dealers.

At Halling & Cayo, S.C., our Securities Litigation team has more than 60 years of combined experience litigating these disputes in State and Federal Courts and Arbitrations throughout the United States.

Representative cases from our Securities Litigation and Arbitration practice group include:

  • Misrepresentations, Customer Specific and Reasonable Basis Unsuitability. A high net-worth individual was sold a private placement via memorandum for a product which was not suitable for him nor had the placement agent sufficiently investigated the company underlying the product to justify the risk/return offered.

Outcome: FINRA Arbitration award of $311,000

  • Breach of Fiduciary Duty. We represented the beneficiaries of a Trust in which the broker, while exercising discretion over the account, mismanaged the Trust’s funds by leaving the investments primarily in equities despite an obligation to protect funds for specific bequests set forth in the Trust. There was also a claim against the corporate trustee for failure to properly discharge its duties.

Outcome: FINRA Arbitration award of $227,500 against the Broker/Dealer and a substantial recovery through confidential settlement.

  • Uniform Securities Law Violation and Unjust Enrichment.  A case originally brought in State Court for misrepresentations and unjust enrichment in the sale of a Tenants in Common interest for commercial real estate. When the defendant filed bankruptcy, an adversary proceeding was brought to obtain recovery for the Plaintiffs.

Outcome: Judgment of $345,276 in an adversary proceeding in the Eastern District of Wisconsin Bankruptcy Court.

  • Negligence/ Unsuitable Recommendations. A claim in FINRA arbitration for unsuitable recommendations in the clients variable annuity account. The unsuitable investments included numerous leveraged and inverse exchange traded funds (ETFs).

Outcome: Substantial recovery through confidential settlement before trial.

  • Misrepresentations/ Unsuitable Recommendations.  The claims involved unsuitable recommendations and misrepresentations in the sale of non-traded real estate investment trusts (REITS) and a private placement (PPM).

Outcome: Award of $186,391.50 in a FINRA arbitration.

  • Misrepresentations/ Unsuitable Recommendations. A set of cases involving high net-worth investors in Colorado, Florida, North Dakota, California, Minnesota and Texas. The cases involved allegations of unsuitable recommendations and misrepresentations for a private placement investment.

Outcome: Substantial recovery via confidential settlement before trial.

  • Unsuitable trade recommendations; failure to properly balance account. A broker made unsuitable recommendations to our client, an unsophisticated, elderly woman. These included annuities with insurance provisions she did not need, risky limited partnerships, interests in a factoring company buying potentially un-collectable health industry accounts receivable, and overly concentrated positions in a risky high tech stock fund.

Outcome: Award at arbitration for Claimant.

  • Unauthorized trading. A broker handling separate accounts for a husband and wife sold stocks from the wife’s account in response to pressure from the husband. In doing so, the broker ignored instructions from the wife not to sell stock from her account. Upon being told by her to “bust” the trade and restore the stock to her account, the broker at first agreed but then refused, after learning the extent to which the stock had risen in value since the date of sale.

Outcome: Substantial recovery via confidential settlement before trial.

  • Misrepresentations/ Unsuitable Recommendations. A prominent broker persuaded various investors to invest in a biotech company claiming he had inside knowledge that the company had developed a cure for AIDS. It had not, and the customers all lost money on the stock.

Outcome: Multiple actions, in court and arbitration, resulted in recoveries through settlements and arbitration awards in excess of $500,000.

  • Unauthorized trading. New York Stock Exchange arbitration concerning the unauthorized sale of a stock and the refusal of the broker-dealer to reverse the sale unless the customer paid for the difference in price that had occurred since the date of the sale.

Outcome: Substantial recovery via confidential settlement before trial.