Jury Finds Brokerage Firm Breached Contract
Plaintiff Tradewinds Financial Corporations said that Refco’s issuance of the margin call was wrongful because the securities held as collateral had not materially declined in value. Tradewinds is seeking $45 million in damages, which will not be addressed until the damages phase of the trial is heard in the fall.
“While the securities at issue were complex, the jury was able to see that the fundamental issue was simple: brokerage firms need to value a client’s assets reasonably and in good faith when issuing a margin call,” said Robert Scannell, a principal of Tradewinds, investment advisor that manages investment partnerships focused on emerging market securities, in a news release.