A US regulatory board has found against Donaldson, Lufkin & Jenrette (DLJ), a unit of Credit Suisse, in a case where a retired couple from Miami were advised to put their assets into a high risk equity investment fund.
An arbitration panel of the National Association of Securities Dealers issued an award of $1.2 million in favor of the couple, Rafael and Corina Montalvo, and against DLJ, which has subsequently been acquired by Credit Suisse.
In 1999, DLJ liquidated the Montalvos’ bond portfolio and put them in aggressive proprietary managed accounts, a discretionary account managed by DLJ’s Miami branch manager and hedge funds.
In my opinion, DLJ acted in a completely irresponsible fashion in selling a retired couple’s bonds and putting them in an aggressive stock portfolio, said Curtis Carlson of Carlson & Lewittes in Miami, who represented the Montalvos.
The arbitration panel found that DLJ was liable for negligence, making unsuitable investments, and failing to supervise the activities of its employees. It awarded $1.2 million in compensatory damages to the Montalvos.