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NASD Arbitration Panel Finds First Union Liable

PR Newswire

A National Association of Securities Dealers (NASD) arbitration panel found Wachovia Securities Corp. (NYSE: WB) (formerly know as First Union Securities), liable and ordered Wachovia to pay investors Pro-Guard International, Inc. and Pro-Guard’s pension plan a total of $391,516.

The arbitrators awarded compensatory damages totaling $334,240, interest at 5 percent from April 9, 2001 to February 23, 2004 and $8,500 for the cost of the Claimants’ expert witness. In addition, the cost of the hearing was assessed against Wachovia.

The Claimants alleged and proved at the arbitration hearing that Wachovia failed to implement a stop loss strategy to protect the accounts from significant investments losses.

According to Robert Uhl, who tried the case: “Despite the fact that Wachovia had the duty to monitor my clients’ accounts, the firm failed to act when the markets plummeted. Fortunately, investors like my clients can turn to the arbitration process to have their case heard.”

“In making this award, the NASD panel sent a message of accountability to Wachovia” according to Mr. Uhl. “If a brokerage firm idly stands by watching a client’s account significantly decrease in value without taking protective action, the brokerage firm will be held responsible. This award requires Wachovia to honor its monitoring obligation owed to my clients.”