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FINRA Panel Rules Against Raymond James - Issues $1.5 Million Award to Investors

David P. Meyer, Esq.

In 2010, an elderly couple, Hurshel and Mildred Tyler of Texas, filed a claim against Raymond James that accused one of the firm's Texas branches of fraud, concealment, and unsuitable sales. Hurshel Tyler is now 87 years-old. His wife, Mildred, suffered from Alzheimer's disease and died during the arbitration proceedings.

On May 10, a FINRA arbitration panel awarded the man and his deceased wife's estate $1.5 million.

According to a Dow Jones Newswire, a former Raymond James Financial Services Inc. independent contractor, Paul Davis, sold the elderly couple life insurance and then arranged for $2 million in loans in their name against the policy. The loan money was then used to purchase variable annuities, which Davis later advised them to exchange. The switch cost them more than $140,000 in surrender fees.

According to the Tylers, Davis had Hurshel Tyler sign paperwork before he executed transactions, but he never explained that he was using the life insurance policy as collateral to take out loans that he would then use to purchase securities on the couple's behalf. As stated in the claim: 87-year-old Hurshel "was not always aware of what he was signing."

A reason for the panel's decision wasn't given. Out of the total award, $1.3 million was for compensatory damages. The rest covered expenses, penalties, and legal fees.

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