Former Meyers Associates, L.P. Client Wins FINRA Arbitration for $234,000 for Unsuitable Recommendations in the High Risk Energy Sector
Posted on Wednesday, December 13th, 2017 at 10:35 am
In November 2017, a former client of Meyers Associates, L.P. won an award in a FINRA arbitration for compensatory damages for $233,703 in compensatory damages as well as forum fees for losses sustained from recommendations and sales of securities which were unsuitable for a former client’s investment needs. The investors were clients of financial advisor Michael LaVolpe (CRD# 5054798). LaVolpe was registered with Meyers Associates, L.P. in New York, New York from 2006 to 2014.
The causes of action included unsuitability, failure to supervise, and breach of fiduciary duty related to the former Meyers Associates, L.P. customer’s allegation that Meyers Associates, L.P. and LaVolpe failed to adhere to their basic duties when opening, administering, and supervising Claimant’s brokerage account. The former client asserted that Meyers Associates, L.P. and LaVolpe recommended and sold securities which were unsuitable for his investment needs, including Ivanhoe Energy, Intrepid Potash, and Rock Creek. The FINRA arbitration hearing was conducted in Des Moines, Iowa. The claimant sought compensatory damages in the amount of $308,703.
Over the past few years, oil prices have significantly declined. A supply glut in 2014 and 2015 led to some of the lowest prices the market has seen in recent years. In turn, securities values also dropped. The volatile energy sector experienced significant turmoil, and many energy companies were negatively impacted when global crude oil prices fell below $40 per barrel at the end of 2015. This was the lowest level since early 2009, as supply was in excess of global demand. Oil and gas companies experienced a spike in bankruptcies, which have left many investors reeling.
In June 2017, FINRA suspended LaVolpe after he failed to comply with an arbitration award or settlement agreement or to satisfactorily respond to a FINRA request to provide information concerning the status of compliance.
In January 2017, FINRA barred LaVolpe after he failed to respond to requests for documents and information sent by FINRA after it began an examination of LaVolpe in connection with allegedly unsuitable activity in a customer’s account.
LaVolpe has been the subject of six customer complaints between 2010 and 2016, according to his CRD report:
April 2016. “Unsuitable investments.” The customer is seeking $110,480 in damages and the case is currently pending.
April 2016. “Unsuitable investment, negligence.” The customer is seeking $545,000 in damages and the case is currently pending.
February 2016. “LaVolpe was named in a customer complaint that asserted the following causes: unsuitability, failure to supervise, and breach of fiduciary duty.” The customer is seeking $308,703 in damages and the case is currently pending.
October 2015. “Unsuitable investments.” The customer is seeking $143,000 in damages and the case is currently pending.
May 2015. “Breach of fiduciary duty, omission of facts, and negligence.” The customer is seeking $300,000 in damages and the case is currently pending.
September 2010. “Clients are claiming breach of fiduciary duty, churning, failure to supervise and negligenceuring the period from September 2009 through May 2010.” The customer sought $296,000 in damages and the case was settled for $60,000.
Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, Meyers Associates, L.P. may be liable for investment or other losses suffered by LaVolpe’s customers.
Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If and have experienced investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies on a contingency fee basis.