Quinault Indian Nation v. KeyBanc et al.
Oct 25, 2007OUTCOME: $391,766 award in favor of Quinault Indian Nation
Carl J. Carlson and Jason T. Dennett, of Carlson & Dennett, P.S., represented the Quinault Indian Nation in this matter. The Quinault Indian Nation invested $3.5 million of federal grant money wit ... h stockbrokers David Hohimer and Michelle Hansen, of McDonald Investments, Inc. (then part of Key Bank, now part of Wells Fargo Investments). The $3.5 million was supposed to be invested in very conservative and liquid investments, because the Nation needed to draw on them throughout the year to meet ongoing operating expenses. The Nation accused Hansen and Hohimer of instead investing the Nation's funds in illiquid, high risk investments (almost exclusively Initial Public Offerings of closed-end mutual funds), because the higher risk investments paid large commissons. Those investments quickly lost a substantial amount of their value, and within a matter of months the Nation withdrew the funds and closed the account. The Quinault Nation claimed $500,000 in losses. After a lengthy hearing, the 3-person NASD arbitration panel, which included one member from the securities industry, awarded the Nation a $391,766 judgment in its favor, apportioned $325,166 against Mr. Hohimer and $66,600 against Ms. Hansen (with McDonald Investments, Inc., jointly liable for all amounts). A copy of the NASD's ruling (case No. 06-01149) can be seen at http://finraawardsonline.finra.org/.
