The actor's adviser, Lisa Detanna, was named one of the 'Top 100 Women Financial Advisors' by Barron's. She's also been named in several arbitration cases and lawsuits.
Larry Hagman, who played the conniving oil baron J.R. Ewing in the prime-time soap opera “Dallas”, has learned that the star broker hired to run your money can turn out to be a flop.
Over the course of 15 hearing sessions in Los Angeles in August and September, Hagman, 79, and his lawyers told a panel of Financial Industry Regulatory Authority arbitrators how he came to lose $1.35 million while entrusting 20 accounts to a big-producing broker and one-time president of the Beverly Hills, California, Chamber of Commerce.
The broker, Lisa Detanna, put Hagman and his wife, Maj, now 82, into a life insurance policy with annual premiums of $168,000, according to the statement of claim. Until Oct. 8 she was the featured mentor on Morgan Stanley Smith Barney's Women Financial Advisors Forum blog, which gives tips on pursuing a career as a broker.
In June, she was named to Barron's “Top 100 Women Financial Advisors,” ranking 98th for overseeing $1.14 billion in assets for clients with a typical net worth of $15 million.
Detanna works in the joint venture of retail brokers run by Morgan Stanley and Citigroup's Smith Barney. Only Citigroup Inc., not Detanna, was the respondent in the Hagman case. A woman answering the phone in Detanna's office referred me to Alexander Samuelson, a Citigroup spokesman, who said “we are disappointed and disagree with the panel's findings, and we are exploring our options.” He wouldn't comment on the company's Beverly Hills broker.
Moving Fast
Hagman and his wife, who have been married for 56 years, probably aren't thinking of their one-time broker as a star today. When they filed their claim for a Finra arbitration in May 2009, they requested the expedited treatment that Finra allows for the elderly or seriously ill. Maj Hagman has Alzheimer's disease, according to the claim.
The Hagmans told Detanna in 2005 that they needed income producing investments that would protect their principal, according to the claim. By June 2008, their accounts were about 69 percent invested in equities.
Finra arbitration often comes under justifiable fire for being too friendly with the securities industry and too chintzy in handing out awards to mutilated investors, but whatever happened behind the closed doors in this case apparently disturbed the arbitrators. On Oct. 6, the panel approved an award that would give $1.1 million to the Hagmans, $439,354 to their lawyers and $20,387 to reimburse them for witness costs.
Delivering a Doozy
Then this doozy: The arbitrators took the unusual step of ordering Citigroup Global Markets to pay $10 million in punitive damages to the charitable organization of the Hagman's choice, citing Finra rules that allow punitive damages when there's been “serious misconduct.” Punitive damages have been awarded in only about 3 percent of Finra arbitrations of claims above $25,000 in the past decade, says Richard Ryder of Securities Arbitration Commentator, which tracks trends in arbitration.
Citigroup asked the arbitrators to expunge references to the Hagman case from the official records that Finra keeps on Detanna. The arbitrators denied that request.
It wasn't the first time a panel of arbitrators decided to keep an incident in her record open to the public, ignoring requests that it be erased.
In a case decided in October 2005, arbitrators said Morgan Stanley should pay $39,000 in compensatory damages to a complaining customer, and that two of the three brokerage employees named in the dispute would be allowed to have their records expunged. In the case of the third employee, Lisa Detanna, the expungement request was denied.
Desk Assistant
Detanna started her career in 1989 as an assistant on a trading desk at the now-defunct Drexel Burnham Lambert, moving on to jobs at Merrill Lynch, Dabney/Resnick/Imperial, and Morgan Stanley.
Her regulatory records with Finra show two settlements with complaining customers, four complaints that were denied by her employers, a pending customer case that seeks $2.5 million, and the Hagman case.
Separate records that Finra keeps on the outcomes of arbitrations reveal a race, gender, and disability discrimination complaint against Smith Barney, Detanna and one of Detanna's colleagues in 2003. The arbitrators in that case told Citigroup Global Markets to pay awards to two of the five claimants, and dismissed the claims against Detanna and her colleague.
Alleged Breach
Morgan Stanley sued Detanna in April 2001. In a complaint filed in federal court in Los Angeles, the brokerage accused her of breach of contract after she left the firm for Citigroup. A judge declined Morgan Stanley's request for a temporary restraining order against Detanna, saying the firm hadn't shown evidence that she had illegally solicited the company's clients.
As can only happen in the bizarre world of post-financial- crisis Wall Street, Detanna wound up working for Morgan Stanley again when it combined its retail brokerage business with Citigroup's Smith Barney unit in June 2009.
When I called seeking a comment from Detanna, her office referred me to Samuelson, the Citigroup spokesman. But Samuelson said he couldn't speak on behalf of Morgan Stanley brokers, referring me to a Morgan spokeswoman.
The Morgan spokeswoman, Tricia Nestfield, said “the investment activity that was the subject of this arbitration occurred before Morgan Stanley Smith Barney came into existence,” adding that the firm was “reviewing the matter.”
Detanna, the rising star, now is a hot potato.
(Susan Antilla is a Bloomberg News columnist. The opinions expressed are her own.)
