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Fidelity Ordered to Pay $4M for Violating Customer’s Options Contract

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Updated on: June 5, 2023

Losses at Fidelity Brokerage Services? Contact KlaymanToskes

National investment fraud lawyers KlaymanToskes reports that Fidelity Brokerage Services has been ordered to pay nearly $4 million by FINRA regulators for mishandling a customer’s account and violating his options contract, by failing to uphold its portfolio margin representations and unsuitably liquidating the customer’s account. 

Fidelity Brokerage Services customers who suffered investment losses at the hands of their broker/financial advisor should contact attorney Lawrence L. Klayman, Esq. at (888) 997-9956 or lklayman@klaymantoskes.com to discuss recovery options. We do not collect attorney’s fees unless we are able to obtain a financial recovery for you.

Self-Directed Accounts Disclosure:  Investors who did not rely on the advice of a broker/financial advisor are not eligible for our services.

Fidelity Ordered to Pay $4M by FINRA for Liquidating Options Account

Fidelity Brokerage Services and National Financial Services (a subsidiary of Fidelity) entered into an Arbitration Award with FINRA’s Department of Enforcement and a former Fidelity customer on May 12, 2023. 

A Financial Industry Regulatory Authority (“FINRA”) arbitration panel held Fidelity and National Financial jointly and severally liable, and ordered them to pay the customer $3,976,048 in compensatory damages. 

In a March 2021 complaint, the customer alleged that Fidelity Brokerage Services and National Financial Services violated his options contract and improperly liquidated his account in March 2020 during the Covid-19 pandemic. 

The customer alleged various causes of action, including several types of fraud (intentional misrepresentation, negligent misrepresentation, concealment, and false promise), as well as breach of written contract, breach of implied covenant of good faith and fair dealing, negligence,  and violation of the Business and Professions Code, Section 17200 et seq. The causes of action related to the unloading of several securities, including the following: 

  • Alphabet Inc. (GOOGL), 
  • Applied Materials (AMAT), 
  • Bank of America Corp. (BAC), 
  • Caterpillar Inc. (CAT), 
  • Dropbox Inc. (DBX), 
  • Facebook Inc. (FB), 
  • FitBit Inc. (FIT), 
  • Goldman Sachs Group (GS), 
  • Microsoft Corp. (MFST), 
  • Morgan Stanley (MS), 
  • Netflix (NFLX), 
  • Peloton (PTON), 
  • Oracle (ORCL), 
  • Pinterest Inc. (PINS), 
  • Starbucks (SBUX), 
  • Tesla Inc. (TSLA) 
  • Texas Instruments (TSN), 
  • 3M Company (MMM), 
  • Uber Technologies (UBER) and 
  • Yeti Holdings Inc. (YETTI). 

Fidelity Customers: Recover Your Losses – Contact KlaymanToskes

Fidelity Brokerage Services customers who suffered investment losses at the hands of their broker/financial advisor should contact attorney Lawrence L. Klayman, Esq. at (888) 997-9956 or lklayman@klaymantoskes.com to discuss recovery options. We do not collect attorney’s fees unless we are able to obtain a financial recovery for you.

Self-Directed Accounts Disclosure:  Investors who did not rely on the advice of a broker/financial advisor are not eligible for our services.

About KlaymanToskes

KlaymanToskes is a leading national securities law firm which practices exclusively in the field of securities arbitration on behalf of retail and institutional investors throughout the world in large and complex securities matters. The firm has recovered over $250 million in FINRA arbitrations and over $350 million in other securities litigation matters. KlaymanToskes has office locations in California, Florida, New York, and Puerto Rico.

Contact

KlaymanToskes, P.A.
Lawrence L. Klayman, Esq.
888-997-9956
lklayman@klaymantoskes.com
www.klaymantoskes.com