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Messing With J.R., the Postscript

Many people on Wall Street were surprised when an arbitration panel awarded Larry Hagman, who played the rapacious oil baron J.R. Ewing in the 1980s hit series “Dallas,” won $11.6 million in a securities arbitration case against Citigroup.

His broker, Lisa Detanna, was also surprised. She recently sent a letter about the case to hundreds of clients at Morgan Stanley Smith Barney, where she now works. Citigroup sold a controlling stake in its brokerage arm to Morgan Stanley in 2009.

“Nothing to me is more important to me than the trust and confidence of my clients,” she wrote last week. “Even if there is no appeal, I want you to know that I, too, am deeply disappointed and astonished by the ruling.”

The ruling against Citigroup Global Markets, released earlier this month, includes $1.1 million in compensatory damages for Mr. Hagman and his wife and $10 million in punitive damages to be donated to the charities of Mr. Hagman’s choice. Citigroup must also pay about $460,000 in legal fees and other costs. It is the largest award given to an individual this year, according to the Financial Industry Regulatory Authority, or Finra, which oversaw the arbitration.

According to a recent column by Gretchen Morgenson, a DealBook colleague, Mr. Hagman and his wife moved their account to Ms. Detanna in 2005.

Ms. Morgenson wrote that documents produced in the Hagmans’ case show Ms. Detanna began upending the couple’s portfolio, taking it from a conservative blend of 25 percent stocks and 75 percent fixed income and cash to the opposite: 75 percent stocks and the rest cash and bonds.

This happened even though the Hagmans told her that they needed income-producing investments that would preserve their principal, according to the documents. Ms. Detanna also sold Mr. Hagman a $4 million life insurance policy that required onerous annual premium payments of $168,000.

When the market fell, Mr. Hagman’s lawyer Philip M. Aidikoff argued that the account’s losses were far larger than they would have been had Ms. Detanna maintained the conservative portfolio. And the life insurance policy, which Mr. Hagman did not need and was therefore unsuitable according to his lawyer, generated losses of almost $437,000 when sold, Ms. Morgenson reported. The losses included an exit fee of $168,610, which Citigroup extracted when Mr. Hagman sold the policy.

A Morgan Stanley spokeswoman declined to comment on the letter and said Ms. Detanna was not available to comment.

A Citigroup spokesman said: “We are disappointed and disagree with the panel’s finding, and we are reviewing our options.”