JP Morgan to Pay $1.9 Million in Auction Rate Securities Case
A Financial Industry Regulatory Authority (“FINRA”) arbitration panel has awarded Ashley Furniture Industries, Inc. (“Ashley”) $1.9 million against JP Morgan Securities, LLC (“Morgan”) for losses in auction rate securities (“ARS”). In its claim filed in August 2010, Wisconsin-based Ashley had sought actual damages of over $26 million.
Ashley alleged that Morgan misrepresented ARS as safe, liquid, short-term investments. In addition, Ashley claimed that Morgan failed to disclose its own involvement in the ARS market.
ARS are floating rate debts or preferred securities with long maturities (often twenty or more years) issued by municipalities or corporations. The interest rates for ARS are periodically reset through Dutch auctions, typically held every 7, 14, 28, or 35 days. When brokerage firms stopped supporting the auctions, the entire ARS market failed en masse in February 2008.
Like most FINRA Awards, the Award does not reflect any rationale for the decision or basis for the amount of damages awarded.
The Florida securities lawyers at Rabin Kammerer Johnson represent investors nationwide in FINRA arbitration matters. Investors nationwide who have incurred recoverable investment losses due to specific failures by stockbrokers and brokerage firms, and who may have a FINRA arbitration claim, may contact the Florida securities lawyers at Rabin Kammerer Johnson for a free and confidential consultation by calling toll free at 877.915.4040.