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Former Sunstate chief owes $1.3M, panel says

Warren Hansen has filed to overturn the award to Sunstate Equity Trading and its owner.

By Helen Huntley, Times Staff Writer
Published March 20, 2007

An NASD arbitration panel says Warren Hansen owes $1.3-million to a now defunct Tampa brokerage firm, Sunstate Equity Trading, and to owner James Kelly for breaking a contract to buy the company and converting company funds to his own use.

The bitter dispute, which dates back to 2004, started when Hansen, then Sunstate's president, agreed to buy the company from Kelly for $300,000. The National Association of Securities Dealers panel found that after the contract was signed, Hansen fired Kelly and without Kelly's knowledge deposited company funds in a new bank account. The panel's award includes $500,000 for punitive damages based on intentional misconduct.

When Kelly discovered that company commissions were not deposited in the firm's "real" account, he called to find out where the money was.

Because of the financial loss and other problems related to the dispute, Sunstate was unable to continue in the brokerage business, said Kelly's lawyer, Stephen Cohen.

However, the case isn't over. Kelly has filed to confirm the award in Hillsborough Circuit Court, while Hansen has filed to overturn it.

"We feel very strongly that the award was inappropriate and unjustified," said Hansen's lawyer, Alan Kipnis.

Helen Huntley can be reached at huntley@sptimes.com.

[Last modified March 19, 2007, 23:28:20]