Panel awards $3.8m to ‘mom and pop’ investors whose risky investments tanked

A Financial Industry Regulatory Authority (Finra) arbitration panel awarded $3.8 million to 13 Florida seniors who claimed a financial advisor made risky investments that depleted their retirement savings. The investors alleged that Charles Schwab & Co, TD Ameritrade Clearing Inc, and TD Ameritrade Inc failed to properly supervise the advisor, Mario Payne, who used their platforms to execute trades in risky "structured products." The award is notable because investors typically have a low success rate in Finra arbitrations against Wall Street firms. The case highlights concerns about the suitability of complex "alternative investments" for everyday investors, particularly in light of recent efforts to expand access to these products. Schwab, while empathizing with the investors, stated that the investment choices were made by the claimants and their independent advisor, not Schwab.

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