Hilliard Lyons ordered to pay $560,000 FINRA arbitration award
In September, 2017, a FINRA arbitrator panel sitting in St. Louis, Missouri issued a $550,000 binding arbitration award against brokerage firm Hilliard Lyons, a FINRA registered broker dealer. The award included $100,000 in punitive damages pursuant to State Farm v. Campbell, a 2003 United States Supreme Court case. The panel also added nearly $20,000 in recoverable costs.
The underlying matter involved an investment in Breitburn Energy, an oil and gas operator that filed for bankruptcy in 2016. The customers brought claims for suitability, alleging that the account was over concentrated in Breitburn shares, which resulted in substantial losses. FINRA member firms are obligated to properly diversify customer accounts, and to make recommendations which are consistent with a client’s risk tolerances and investment objectives.