Neuberger Is Slammed With A $5.5M Arbitration Award

A Chicago, Illinois Financial Industry Regulatory Authority (FINRA) arbitration panel has awarded Claimants $5 million in compensatory damages to be paid by Neuberger Berman LLC.

In a claim that was filed in May 2010, the Claimants asserted various causes of action including breach of fiduciary duty, fraud, breach of contract, negligence and violation of the Illinois securities laws, among other things. The claim was related to the allegation of a fraudulent scheme to target investors, especially high net worth individuals to raise funds for Lehman Brothers Holdings and Lehman Brothers, Incorporated under the guise of principal protected notes.

The evidentiary hearing took eight (8) days and after it concluded the FINRA arbitration panel took the case under advisement to consider all of the oral and documentary evidence prior to reaching its decision. The panel dismissed the Claimants’ claims against Joseph Vincent Amato, Bradley Curtis Tank, Edward Stephen Grieb and Brad Elliott Cetron. Thereafter, tThe panel concluded that Neuberger Berman was liable and ordered to pay Claimant Edward W. Leshin Rollover IRA the sum of $115,000 in compensatory damages; that Neuberger Berman was liable and ordered to pay Claimant Edward W. Leshin Rollover IRA interest on the $115,000 at the rate of 3% per annum from August 18, 2008 until the award is paid; that Neuberger Berman is liable and ordered to pay Claimant Edward W. Leshin the sum of $7,500 in attorney’s fees pursuant to the Illinois Consumer Fraud and Deceptive Trade Practices Act; that Neuberger Berman is liable and ordered to pay Claimant Almalech Living Trust the sum of $250,000 in compensatory damages; that Neuberger Berman is liable and ordered to pay Claimant Almalech Living Trust interest on the $250,000 at a rate of 3% per annum from July 23, 2008 until the award is paid; that Neuberger Berman is liable and ordered to pay Claimant Ira Robb Rollover IRA the sum of $1,680,000 in compensatory damages; that Neuberger Berman is liable and ordered to pay Claimant Ira Robb Rollover IRA 3% interest per annum from July 23, 2008 until the award is paid; that Neuberger Berman is liable and ordered to pay the sum of $3,000,000 in compensatory damages to Claimant Iracini Equity LP; that Neuberger Berman is liable and ordered to pay Claimant Iracini Equity LP interest on $1,000,000 at the rate of 3% per annum from April 1, 2008 until the award is paid; that Neuberger Berman is liable and ordered to pay Claimant Iracini Equity LP interest on $2,000,000 at a rate of 3% from July 23, 2008 until the award is paid and also ordered to reimburse the Claimants $600 for their non-refundable portion of their filing fee. Finally, the panel split the $20,400 forums fees for the arbitration as follows: $6,120 assessed against the Claimants and $14,280 was assessed against Neuberger Berman. (FINRA# 10-02252; Ira Robb, Individually and as General Partner of Iracini Equity LP, and as Beneficiary of the Ira Robb Rollover IRA, Edward W. Leshin as Beneficiary of the Edward W. Leshin Rollover IRA, and Leonard and Kimberly Almalech, as Co-Trustees of the Alamalech Living Trust v. Neuberger Berman llc, Joseph Vincent Amato, Bradley Curtis Tank, Edward Stephen Grieb, Brad Ellitt Cetron and Brian Hahn).

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