TLP: "J.R." Takes on Citigroup and Hits a Texas-Sized Gusher

citigroup investments
The last time someone shot J.R., it took forever to find out who did it. This time, the alleged culprit was no secret. But actor Larry Hagman had to go through an arbitration process to get a resolution.

A securities arbitration panel awarded Mr. Hagman and his wife Maj, 82, a big victory against Citigroup, which had overseen some of the couple’s investment accounts. The three arbitrators who heard the case ordered Citigroup to pay the Hagmans $1.1 million in compensatory damages — slightly less than the $1.345 million they had requested — as well as $439,000 in legal fees.

But the kicker was the punitive damages award in the case, which accused Citigroup’s brokerage unit, Smith Barney, of fraud, breach of fiduciary duty and failure to supervise the broker overseeing the Hagmans’ funds. The panel ordered Citigroup to pay $10 million to charities chosen by Mr. Hagman.

The award was the largest given to an individual this year, according to the Financial Industry Regulatory Authority, which oversaw the arbitration. The Hagman award was also the only one in which a panel ordered that punitive damages go to charity, Finra said. ...

So here’s what happened to the Hagmans: In 2005, they moved their account from a registered investment adviser to Lisa Ann Detanna, a broker at what is now Morgan Stanley Smith Barney. (When the couple first invested with Smith Barney, Citigroup still owned it; Citigroup sold a controlling stake in the brokerage to Morgan Stanley in 2009.)

According to documents produced in the Hagmans’ case, Ms. Detanna quickly 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.

Never mind that when the Hagmans first sat down with Ms. Detanna, they told her they needed income-producing investments that would preserve their principal, according to the documents.
Doesn't sound like the problem was some misunderstanding caused by that "Dallas" drawl Hagman rolled out for the show. For its part, Citigroup said it wasn't responsible for the losses, the Times reports, and may be considering trying to get the decision reversed.

But who knows who Hagman may have in his corner. After all, "Dallas" wasn't his first rodeo.

The Lazy Paperboy

Some say he’s half man half fish, others say he’s more of a seventy/thirty split. Either way he’s a fishy bastard.