A Finra arbitration panel awarded two family trusts over $800,000 in their claim against National Asset Management alleging unsuitable trading, but the award was far smaller than what was originally sought because the panel found the claimants negligent as well, according to the industry’s self-regulator.

In a claim filed in 2015, two trusts of Gerald Butler, Jr. alleged fraud, breach of fiduciary duty, negligence and violation of Illinois’ regulations on the financial exploitation of seniors, among other infractions, according to an award document published by Finra’s Office of Dispute Resolution. The claim alleged that the trustee and the financial advisor assigned to the trusts “cut them off from all account related information” while allegedly engaging in strategies such as writing call options and buying put and call options, Chinese stocks, penny stocks and a leveraged ETF, according to the award document. The trusts sought $1.865 million in compensatory damages and treble damages, Finra says.

The arbitration panel found that NAM did indeed breach its fiduciary duties and caused the trusts $1.165 million in damages, according to the award document. But the panel also found the trusts negligent and “apportioned thirty percent (30%) of the fault to them,” according to the award document.


As a result, the panel ordered NAM to pay $815,336 in compensatory damages, $326,134 in lawyers’ fees and $3,766.81 in costs, plus interest on all three until they are paid in full, Finra says. The panel also dismissed the trusts’ claims against National Securities Corporation and denied a request from NAM to expunge their records from Finra’s Central Registration Depository, according to the award document.