February 18, 2011 – Crosby & Higgins LLP Delivers First FINRA Arbitration Award against Merrill Lynch for Institutional Client Holding Auction Rate Securities
February 18, 2011
Crosby & Higgins LLP has earned an important victory in the ongoing fight for corporate and institutional investors still trapped in auction rate securities sold to them by firms like Merrill Lynch, Pierce, Fenner & Smith, which previously entered into regularly settlements to redeem the ARS held by its retail investors, while at the same time excluding certain corporate and institutional holders harmed by the same conduct. After an exhaustive, two week evidentiary hearing held in Houston, Texas, which was led by Crosby & Higgins LLP Managing Partner Todd A. Higgins, Esq., the Financial Industry Regulatory Authority Panel found Merrill Lynch liable and ordered it to pay the claimant significant compensatory damages and interest, and also ordered it to pay all FINRA forum fees. The Award, which is the first of its kind against Merrill Lynch arising out of the sale of ARS to an institutional investor, involved claims for breach of contract, breach of fiduciary duty, fraud and violations of the Texas Securities Act. It also comes as welcome news for institutional investors who continue to hold billions of dollars in illiquid ARS and who have little choice but to pursue relief through arbitration.