8 years Ago, MarcWites
Wites Law Firm today announced that Judy Schulman, a Boca Raton resident who suffered substantial losses in a risky portfolio of Collateralized Mortgage Obligations (CMOs) sold to her as a safe and conservative investment by Brookstreet Securities Corporation, received an arbitration award of $523,300. After a 4-day hearing, the Financial Industry Regulatory Authority (FINRA) Arbitration Panel found Brookstreet and its President, Stanley Brooks, jointly and severally liable for Ms. Schulman’s losses.
Ms. Schulman, who was 53 when the account was opened, argued that Brookstreet failed her by recommending a risky, complex portfolio comprised almost entirely of CMOs, which Brookstreet marketed to her as a conservative investment that would yield income and was as safe as a bank CD. Ms. Schulman had very limited investment experience, and clearly told her broker that she wanted only very conservative investments and did not want to lose any money.
Ms. Schulman’s lawyer, Marc A. Wites of Wites Law Firm, in Lighthouse Point, Florida, argued that Stanley Brooks should be held jointly and severally liable because Brooks’ directed his firm to engage in a company-wide scheme to misrepresent and promote CMOs as safe, conservative investments, and that Brooks and the firm knew that they were volatile, risky and suitable only for sophisticated investors.
CMOs are highly complex and volatile investments suitable only for sophisticated investors. In a 1993 notice to its members, FINRA (which was then known as the National Association of Securities Dealers or NASD) pronounced that CMO positions like the ones sold to Ms. Schulman are volatile, and suitable only for sophisticated investors with high risk profiles. Ms. Schulman’s Brookstreet account declined in value within months after it was opened in September 2005, and it never recovered.
According to Mr. Wites , the case was the first in the nation concerning Brookstreet’s CMO Program to reach the final arbitration hearing, which is the equivalent of a trial. He added, though, that unlike Mrs. Schulman’s case, the dozens of other cases against Brookstreet were brought by investors who allege that they were fraudulently induced to purchase unsuitable CMOs and suffered losses caused, in part, by margin calls that led to the ultimate demise of Brookstreet in June 2007. Ms. Schulman’s account was not subject to any margin calls, and was closed before Brookstreet went under.
The Arbitration Panel also found that Brookstreet and Mr. Brooks failed to comply with discovery requests and orders of the Panel, and sanctioned them $15,000. As additional sanctions, the Panel ordered them to pay Ms. Schulman’s attorney’s fees, and to pay all of the hearing session fees charged by FINRA to run the arbitration, which totaled $20,400.
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Marc: Congratulations on the School Board settlement! Glad you were about to get a good result for your clients. Having been your adversary early on in the case, I can say it was a long battle and the great result was due to your persistence and creative approach to the litigation. Well done!Review From Web
Attorneys often convey a sterile attitude toward clients that is often void of sincerity and compassion, and may even be condescending. Marc Wites has not lost his humanity!! Mr. Wites is an attorney that continues to stay abreast of the law, which results in excellent results for his clients. Marc Wites is my “go to” attorney when I am looking for A-rated service and quality representation. I consider Marc as not only my attorney but a friend as well.Review From Web
An impressive chamber of knowledgeable attorneys/staff that stand ready to work tirelessly on behalf of their clients. Marc Wites is the quintessential Perry Mason advocate–erudite, prepared, and brilliant. He is ready to take on any legal challenge. Above all, he is understanding of the working class. Surely, he’s not just in it for the money; he genuinely wants to help people. Overall outstanding law firm.Review From Web
Mr. Wites accepted my case when other lawyers would not. He never promised what he couldn’t deliver. He was realistic, upfront and honest. He actually returns phone calls. And he is willing to explain the legal process and to take time to answer questions. I would definitely contact Mr. Wites if I ever needed a lawyer again.Review From Web