Award and settlements totaling nearly $14 million dollars on behalf of a defrauded Merrill client.

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Commercial Litigation

Prosser, Clapper & Johnson Law (“PC&J”) is pleased to announce that their Client has been awarded over $7.5 million dollars by a FINRA Arbitration Panel against former Merrill broker, Tom Buck, following eleven (11) days of hearings conducted in February and March of 2022. A copy of the Award can be found at this link.

The Award is notable in several particulars:

  • The amount of the Award is notable since it ranks as the largest customer award in a FINRA arbitration so far in 2022. It is also the largest FINRA RICO award in at least the last five years.
  • The broker involved was the once high-flying, Tom Buck, formerly of Merrill Lynch. Buck was reportedly Merrill’s largest producer in the state of Indiana and one of the largest in Merrill’s entire 14,000-broker retail system, with customer assets totaling $1.3 billion dollars ($1,300,000,000). He was perennially on Barron’s list of America’s 100 Top Financial Advisors, receiving the honor in at least 2010 through 2015. Buck’s fall from these rarified heights began with his sudden firing in March 2015 for overcharging customers, followed by a lightning-fast industry bar by FINRA just five months later. Buck was thereafter prosecuted for federal securities fraud―a charge to which he plead guilty―and was sentenced to 40 months in prison. At his sentencing hearing, the Government presented proof that Buck’s fraud had extended to well over one hundred Merrill clients.
  • The Award is by far the largest one involving Mr. Buck. Merrill has acknowledged settlements with nearly 35 of Buck’s other clients, paying some $5.8 million to this group as a whole. (See Mr. Buck’s public FINRA Brokercheck.) This collective total, however, is less than the result PC&J Law obtained for their single Client here.
  • The Panel found liability under “RICO”―the Racketeer Influenced Corrupt Organizations Act. RICO can apply when the defendant is found to have operated his business as a criminal enterprise and requires the award of both treble (triple) damages and attorney’s fees. Here the arbitration Panel found liability under both the Federal RICO statute, as well as its Indiana analogue, the Indiana Corrupt Business Influence Act. Pursuant to the two RICO statutes, the Panel awarded treble damages totaling $2,310,806, as well as a full award of attorneys’ fees and costs.
  • Finally, the Panel recognized the Client’s right to “well managed damages.” Such damages give an investor the returns she reasonably should have received if her account had not been mismanaged. Well managed damages can thus be awarded, as here, even when the client’s accounts made a profit. Here, the Panel found that our Client should have made some $5.8 million dollars more than she actually did and was awarded pre-judgment interest on this amount.

Mr. Buck’s prior firm, Merrill Lynch, was also originally a Respondent in the Arbitration. Merrill, however, settled before trial for $5,500,000. Certain details of this settlement can be found on Mr. Buck’s publicly available regulatory record maintained on the CRD system. The Firm also secured a $946,868 recovery from the SEC fund established for victims of Buck’s fraud.

Between the FINRA award against Mr. Buck ($7,526,826), the settlement with Merrill Lynch ($5,500,000) and the recovery from SEC Victim Fund ($946,868), the Awards/ recoveries Prosser, Clapper & Johnson obtained for their Client totaled nearly fourteen million dollars ($14,000,000).

Per PC&J’s founder, Niel Prosser: “We are pleased that our Client had the tenacity to stand up to Merrill and Buck. This case highlights why it is so important to retain experienced securities counsel. Even when an investor is harmed by serious wrongdoing, results like this do not just happen. Rather, they are the result of experience, hard work, and more than a little resourcefulness. We were able to bring all of these factors to bear for our Client here to achieve this result.”

Based in Memphis, Tennessee the attorneys at Prosser, Clapper & Johnson focus on litigation and regulatory matters in the financial services industry, representing the full spectrum of clients, including investors, financial advisors, and brokerage/investment advisory firms. This case was tried by Firm partners, Niel Prosser, Rob Clapper, and Kyle Johnson.

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  • 901-820-4433

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