The investor, Chase Bailey, an internet entrepreneur and movie producer, filed the case in 2011, also naming Bank of America Corp’s Merrill Lynch unit, Deutsche Bank Securities Inc, a unit of Deutsche Bank AG and Oppenheimer & Co.
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Bailey accused the broker, Karl Hahn, who worked at the three firms consecutively for roughly seven years between 2004 and 2011, of misrepresenting covered calls, a variable annuity and other investments he recommended while at the three firms.
Those other investments included unsuitable premium-financed life insurance on which Mr. Hahn generated large commissions, Michael Perry, the attorney who represented Bailey told Dow Jones Newswires.
Hahn also convinced Bailey to invest roughly US$2.3 million in a real-estate financing deal involving properties on the coast of New Hampshire that ultimately "turned out to be completely fraudulent," said Perry, a shareholder at Murphy & King in Boston. "He just took the money."
The investor lost about US$6 million in total from his investments with Hahn, the attorney added.
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By GlobalDataArbitrators awarded the investor some US$4.1 million in compensatory damages and US$6.4 million in punitive damages, according to the ruling.
The decision is the second against Hahn in two months. FINRA arbitrators, held Deutsche Bank and Hahn jointly responsible in February in a US$934,000 ruling on behalf of a couple and their trusts, who alleged he swindled them in a multi million-dollar insurance deal.
