Lisa Detanna was a newcomer to the Barron’s Top 100 Women Financial Advisors list this year. Odds are she won’t make the cut in 2011, after being hit with an $11.5mil arbitration settlement yesterday in relation to the accounts of actor Larry Hagman. Hagman, 79, is best known for his role as the villainous J.R. Ewing on the television show “Dallas.”
Detanna, the former President of the Beverly Hills Chamber of Commerce, is the latest Hollywood hotshot to be hit with multi-million dollar claims. Bambi Holzer, another Beverly Hills-based broker, was profiled in a Forbes feature, “Beware of Your Broker,” for racking up similarly costly settlements. Whereas Holzer’s penalties of $11.6mil came as the result of 54 separate claims, however, Detanna has nearly accrued that much in a single case.
The $11.5mil arbitration sum against Detanna includes a whopping $10mil in punitive damages, to be paid to the charities of Hagman’s choice. Punitive damages, according to the Financial Industry Regulatory Authority’s Arbitrator’s Manual, are “not intended to right a wrong but are intended to punish the wrongdoer and to deter future wrongdoing.” Furthermore, the awarding of punitive damages indicate that Detanna engaged in “serious misconduct.”
Hagman’s claim, which was filed in late May of 2009, relates to the mishandling of unspecified securities, as well as the purchase of a life insurance policy, by Detanna and Citigroup. Hagman asserted that Detanna’s advisory group had breached written contracts and fiduciary duty, committed fraud by misrepresentation and omission, failed to supervise and control accounts, and violated laws and NASD/NYSE rules. A second claim against Detanna, with an unspecified claimant, alleges an additional $2.5mil in damages for unsuitable investments and failure to protect against losses.
Beware of your broker indeed.