Raymond James Financial Services, Inc. paid $1,791,547 to Hurshel Tyler, an 87-year-old Texas man, after unsuccessfully appealing the largest arbitration award ever against the firm which was rendered on May 10, 2011.
Raymond James appealed the arbitration award on June 8, 2011.
Tracy Pride Stoneman, a Colorado-based and Texas-licensed lawyer who represented Tyler in the in Dallas, Texas arbitration, says that appeals of arbitration awards are extremely rare; in her 20 years of representing investors against brokerage firms, she has never had an arbitration award appealed. What made this appeal surprising is the fact that Tyler is so elderly and not in the best health. The Judge dismissed the appeal and confirmed the arbitration Award on October 12.
In Stoneman's opinion, the grounds for the appeal were very weak, with the firm arguing that New York law, not Texas law should have applied to the case and that would have prevented the arbitrators from providing certain remedies. But Raymond James never raised that argument during the five days the case was arbitrated in March 2011. Nor did the firm ever object to Stoneman's presentation of the case under Texas law.
At oral argument on the appeal, Dallas, Texas District Judge Emily Tobolowsky, seemingly incredulous herself, asked Raymond James' counsel: "There was no briefing, no argument, no objection to the testimony regarding attorneys' fees?" Raymond James had 30 days to pay the Award and the firm made good on it today, paying an additional $43,696 in interest, bringing Raymond James' total payment to $1,791,547.
The focus of the case was Daul Davis, a Raymond James branch office manager in the firm's Amarillo, Texas office, who upon assuming the role as the Tyler's new stockbroker, recommended that the Tylers liquidate their municipal bond portfolio and load up on high commission paying variable annuities and life insurance.
