His broker's bad advice put the investor's money in unprofitable stocks for years. He's awarded $2.66-million.
By Associated Press
Published August 1, 2004
NAPLES - An arbitration panel has ordered the brokerage firm Wachovia Securities to pay a retiree $2.66-million for giving him bad investment advice.
In a complaint filed with the National Association of Securities Dealers, John DeBoer, 69, claimed his financial standing was hurt by "unsuitable recommendations" from his broker George Walker and Wachovia's failure to supervise Walker.
DeBoer sold his family's trash disposal business to Houston-based Waste Management, the nation's largest trash hauler, invested profits from the sale and retired early as a vice president for Waste Management.
Lacking a college degree, DeBoer said he relied completely on Walker's advice for nearly 25 years.
The account made more than $1-million over its lifetime, said DeBoer lawyer Chris Vernon. But a financial expert who testified at the seven-day hearing in Tampa said his account underperformed virtually every market, including the Standard & Poor's 500 index.
At one point, nearly all of DeBoer's money was invested in unprofitable stocks trading at less than $6 per share, exposing him to "inappropriate and unnecessary risks" and violating state investor protection laws, Vernon said.
A spokesman for Wachovia in Richmond, Va., declined to comment on the decision, saying it was against company policy.
In a filing with the NASD, Wachovia lawyer Robert Kane said Walker's recommendations were "reasonable, appropriate and suitable." DeBoer was aware of the risks and chose many of his own investments, Kane said.
Vernon filed a request to recover his attorney's fees Thursday at federal court in Tampa.
