A New York state judge refused to overturn a decision earlier this year by an arbitration panel, awarding $14.5 million in damages to a New York couple. The arbitration award is one of the largest handed down by a New York Stock Exchange panel.
It's rare for courts to overturn a arbitration decision, unless there is evidence a panel clearly disregarded the law.
In May, the three-arbitrator panel awarded $11.8 million in damages plus interest and legal fees to Charanjit and Harpreet Sahni, a married couple living on Long Island, N.Y. The couple alleged that a group of brokers at what used to called Prudential Securities mismanaged their money, causing losses in excess of $21 million in early 2000.By 2004, the Sahnis' once $23 million brokerage account had shrunk to about $1 million. In 2003, Prudential and Wachovia (WB) entered into a joint venture in which Prudential sold a majority stake in its brokerage operation to the Charlotte, N.C. lender. Shortly after the arbitrators issued their decision, a Prudential spokesman said the big insurer was considering asking a judge to vacate the award. A Prudential spokesman could not be reached for comment on New York Supreme Court Justice Walter Tolub's decision upholding the award. "The award against Prudential is obviously very substantial, and we always believed it was appropriate,'' says Robert Kraus, one of the lawyers for the Sahni family. "It is gratifying to see the process work in this case and the Supreme Court uphold the award.'' Kraus worked on the case with noted shareholder attorney Thomas Ajamie.