Shareholders Secure $4 Million FINRA Arbitration Award for Client

Murphy Pearson Bradley & Feeney won a two-week FINRA arbitration against Fidelity Brokerage Services, LLC and its clearing and custodial subsidiary National Financial Services, LLC (collectively, “Fidelity”), on behalf of an options trader.  The FINRA Panel awarded Murphy Pearson Bradley & Feeney’s client nearly $4 million in compensatory damages. The MPBF litigation team was headed by founding partner Michael P. Bradley and partner Patrick J. Wingfield and included director Geoff T. Macbride.

On March 13, 2020, in-midst of the sharp market downturn caused by the COVID-19 pandemic, Fidelity liquidated some of claimant’s option positions in his portfolio margin account despite claimant promising (and later providing) a cash infusion of $9 million to cover the margin call.  Claimant alleged Fidelity’s liquidation was improper and caused him to suffer approximately $2.33 million in losses that had a cascading impact leading to additional losses and the loss of an investment opportunity of a lifetime as the markets rebounded at a historical level after March 2020.  More specifically, the claimant alleged Fidelity failed to honor its portfolio margin supplemental agreement, made false representations, and otherwise mishandled his portfolio margin account and the margin calls at issue.  In response, Fidelity denied all liability and argued they delivered a portfolio margin account and the margin contract(s) at issue allowed Fidelity, to liquidate the claimant’s account at any time, with or without notice and in its sole and absolute discretion, despite its obligations of good faith and fair dealing as codified in FINRA Rules and regulatory publications.

After two weeks of testimony from 18 witnesses, including two expert witnesses called by Fidelity regarding complicated issues of account management, margin rules, market risk, options strategies, and damages, the FINRA panel sided with claimant and awarded him nearly $4 million in compensatory damages. The full decision can be found here: 21-00819.pdf (

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