Preview
FILED: LEWIS COUNTY CLERK 01/24/2022 03:40 PM INDEX NO. EFCA2017-000246
NYSCEF DOC. NO. 50 RECEIVED NYSCEF: 01/24/2022
STATE OF NEW YORK
SUPREME COURT COUNTY OF LEWIS
RONNIE DORRITY,
AFFIRMATION IN
Plaintiffs,
SUPPORT OF THE
PETITION TO CONFIRM
ARBITRATOR'S AWARD
& OPPOSITION TO
TERRY JAMES DORRITY,
PETITION TO MODIFY OR
Defendants. DISMISS AWARD
Stuart E. Finer, Esq., an attorney duly admitted to the practice law in the State of
New York affirms the following under the penalties of perjury:
ARBITRATION WAS CONDUCTED PURSUANT TO DEFENDANTS REQUEST TO
COMPELL ARBITRATION AND AN AWARD WAS GRANTED TO THE
PLAINTIFF BASED UPON THE EVIDENCE PRESENTED
1. A hearing was conducted with regard to the factual issues in the arbitration
of the claims by Ronnie Dorrity against his nephew, Terry James Dorrity, by the
appointed guardian retired Supreme Court Judge, Samuel Hester.
2. After the trial, arbitrator Hester arrived at a decision in favor of the
Plaintiff as outlined in the decision attached hereto and made apart hereof.
3. During the course of the trial, evidence was submitted to support the fact
that Ronnie Dorrity was an unsophisticated investor who lost his job at the Lyons Falls
Paper Mill when it closed and was hired as a part-time bus driver. At the same time, he
was solicited by Terry Dorrity to turn over his pension funds with the promises of a much
higher return in commodities and futures then he was earning with Fidelity. Ronnie
1 of 16
FILED: LEWIS COUNTY CLERK 01/24/2022 03:40 PM INDEX NO. EFCA2017-000246
NYSCEF DOC. NO. 50 RECEIVED NYSCEF: 01/24/2022
Dorrity had no experience in trading commodities, and in fact had limited experience
with any investments as his 401K pension that was managed by the worldwide brokerage
firm known as Fidelity. He clearly stated his strategy and goals were Conservative.
4. In arriving at the arbitrator's decision there was clear and convincing
evidence that the nephew/Defendant was banned/terminated from ever providing
commodities services through NFA (Nation Futures Association) for transactions against
investors that mirrored the actions against the Plaintiff. Attached hereto is a copy of the
Decision that removed the Defendant as a member and clearly showed the abusive
practices by the Defendant where his customers made no money or lost money while the
Defendant earned 1.8 million dollars in commissions. The Decision specifically
references the Plaintiff Ronnie Dorrity. This is the same organization that as a result of
the termination/suspension of the Defendant, refused to accept an arbitration claim
against a banned broker and therefore the NFA rules of arbitration cannot apply.
5. This brings us to the argument now presented before the Court for a third
time, requesting that the case be dismissed on Statute of Limitation grounds. Initially,
counsel for the Defendant submitted a request for arbitration and a Motion to Dismiss the
Plaintiffs claim for violating the two-year Statute of Limitations under the NFA rules.
This Court refused to dismiss the Plaintiffs claim and instead referred the claim to
arbitration. Both counsel by their consent agreed that retired Judge Hester would act as
the arbitrator. The Statute of Limitations argument was for the second time made before
Arbitrator Hester prior to the commencement of the hearing. Attached hereto and made a
part hereof is the Arbitrator's decision on Motion to Dismiss on statute of limitations
grounds. The motion was denied and the parties were directed to proceed with arbitration.
2
2 of 16
FILED: LEWIS COUNTY CLERK 01/24/2022 03:40 PM INDEX NO. EFCA2017-000246
NYSCEF DOC. NO. 50 RECEIVED NYSCEF: 01/24/2022
The Statute of Limitations dismissal is now the law of the case. The Defendant by
consent, and upon his own motion, has agreed to arbitration.
6. Based upon the evidence presented to the Arbitrator, the Arbitrator was
able to arrive at a damage amount as set forth on the various monthly statements that
were presented to the Arbitrator. The damages were clearly set forth in the Arbitrator's
award and as a result the Arbitrator made a determination with regard to the amount of
damages and the application of appropriate interests.
7. It is interesting to note that both parties provided expert testimony and
both experts came to the same conclusion that the investment strategy used by the
Defendant for investing the Plaintiff's pension/savings proceeds was unsuitable. Based
upon the fact that the investments were unsuitable, the arguments regarding the real estate
crash or any other market slide was not the cause for the Plaintiff's losses. The Plaintiff's
losses were clearly based upon unsuitable, high-risk investments that were inappropriate
for the Plaintiff.
8. The Plaintiff's expert further set forth reasons why the Defendant was
required to follow SEC "Know Your Customer Rules", and the manner in which the
commodity/future investments were totally inappropriate for the Plaintiff. The fact that
the investments were unsuitable and a breach of a fiduciary duty was the basis for the
Arbitrator's conclusion that the Plaintiff was entitled to damages.
9. The Defendant also tries to rely upon the fact that the Plaintiff did not read
the back of statements, did not read the small print, in fact did not read the notices raised
in the Defendant's appeal because the Plaintiff stated that he relied totally on his nephew
that he was not able to read and understand the notices in any event and repeatedly stated
that his understanding of the investment strategy was "conservative". The Plaintiff further
3
3 of 16
FILED: LEWIS COUNTY CLERK 01/24/2022 03:40 PM INDEX NO. EFCA2017-000246
NYSCEF DOC. NO. 50 RECEIVED NYSCEF: 01/24/2022
stated on cross that had the defendant gone through the notices like defendant's attorney
did paragraph by paragraph, Plaintiff would never have signed and consented to an
investment strategy that stated he could lose all of his investment.
10. The finding by the Arbitrator ties into the fact that the broker/Defendant
had a duty to represent, clearly and properly, the risks of the investments and was further
obligated to make investments consistent with the Plaintiffs stated goals and objectives.
Investments in futures and commodities was clearly inconsistent with the Plaintiffs stated
goals and objectives and as a result the only one that made money was the Defendant and
the only one who lost all of their money was the Plaintiff.
11. The Plaintiff also stated that had those notices been actually reviewed with
the Plaintiff, the Plaintiff would have never consented to any of those investments, nor
would the Plaintiff have accepted those high risks, in particular the risk that all of his
money could be lost.
12. On its face it makes no sense that an unsophisticated individual with no
investment experience and limited education would invest in conunodities and futures or
would even understand a commodities or futures investment. The Arbitrator came to the
conclusion that the Defendant broker/introducing broker failed to exercise appropriate
duties to warn the Plaintiff of the risks associated with the investments. As a result, the
Plaintiff lost all of his investment.
13. There is no testimony that the Plaintiff ever agreed to commodities and
futures based upon his interest in a higher return than he was eaming with the Fidelity
investment account.
14. Testimony sets forth that documents were sent to the Plaintiff with
instructions where to sign and return without any explanation as to what the documents
4
4 of 16
FILED: LEWIS COUNTY CLERK 01/24/2022 03:40 PM INDEX NO. EFCA2017-000246
NYSCEF DOC. NO. 50 RECEIVED NYSCEF: 01/24/2022
meant, as to what the risks were or what the purpose of the document in direct
contravention to the Defendant's handwritten statement that he would explain all the
investments and would not make them without the Plaintiff's consent.
15. The Arbitrator also in the award set forth a formula for calculating interest
over the various periods of time and the calculation was included in the Plaintiffs Petition
to Confirm the Award. If the Court fmds that the Statutory interest of nine percent should
apply to each of those past years for prejudgilieiit interest, as opposed to the formula set
forth in the arbitrator decision, your Affirmant has no objection to applying the nine
percent legal rate back to the dates in time as set forth in the arbitrator's decision.
16. Also, Defendant's claim that the SEC rules have no jurisdiction is also
disputed by the Plaintiff's expert.
DEFENDANT BREACHES FIDUCIARY RESPONSABILITY AND
DAMAGES ARE APPROPRIATE
17. All that the Plaintiff knew was something called Alaron was on his
statement and that it went from 144,000.00 to zero. The Defendant admits that page 14,
the dollar amount he received and that which was in the accoüilt was 169,000.00 and that
the client received $27,000.00 with a loss of $141,000.00. See page 14. (transcript page
numbers)
18. Again, on page 65, Defendant admits that losses in accordance with the
statement were $142,000.00. At pages 52 and 54 the Plaintiff admits that money
transferred into the Plaintiffs Millennium account were $60,300.00 and $80,000.00 plus
another $20,000.00 for a total of $160,300.00.
5
5 of 16
FILED: LEWIS COUNTY CLERK 01/24/2022 03:40 PM INDEX NO. EFCA2017-000246
NYSCEF DOC. NO. 50 RECEIVED NYSCEF: 01/24/2022
19. At all times Plaintiff believed that the nephew was managing the Plaintiffs
money, because the statements showed how the results of the Defendant's management
was still in the Plaintiffs account until it went to zero. The Plaintiff had no idea who the
money was transferred to and that the Defendant misrepresented that he was managing
the money when in fact the money manager was changed to Ed Padone (See page 34).
This was never explained to the Plaintiff nor the money manager through Ace
Investments, a person named Ud Chang, all were identified during the course of the
where the Defendant admits that an entity called Crossland was the
hearing testimony
clearing firm and that a firm known as Ace made the investments page 58. Defendant was
not managing the money in conservative investments but turned the funds over to
different management firms, mainly Ace and Zeinith with two different money managers,
which resulted in damages to the Plaintiff in the sum of $142,000.00.
20. See pages 61 and 62, the Defendant continued to receive commissions
initially six percent or $4,800.00, and thereafter nine percent annually page 37. Clearly
the arbitrator concluded that how in the world could the Plaintiff make money when the
Defendant was taking nine percent of the assets as commission, meaning that the
investment would have to have a return of at least nine percent to break even.
21. These are the same type of activities that resulted in the Defendant paying
fines and being banned by the National Futures Association as a trader or advisor or
introducing broker with the NFA. Defendant paid fines of $10,000.00 in the year 2000
and $9,000.00 in the year 2002 (See page 19), and agreed to be banned after the
investigation by the NFA for eight years and would not be allowed back without paying
$100,000.00 fine and a successful application to the NFA (See page 31).
6
6 of 16
FILED: LEWIS COUNTY CLERK 01/24/2022 03:40 PM INDEX NO. EFCA2017-000246
NYSCEF DOC. NO. 50 RECEIVED NYSCEF: 01/24/2022
22. Defendant never told his uncle that he was banned from trading with the
NFA (34).
23. At all times the Defendant was licensed as an investment advisor in
Pennsylvania and was never licensed in New York. However, the defendant solicited his
uncle in New York and requested he provide other investors from New York, all a
violation of his license.
24. The Defendant confirmed that he sent a letter and advised in quotes "I will
soon"
go over all the papers with you either way we will talk (18). The Defendant never
went over any of the papers that were reviewed during the hearing that were signed by
the Plaintiff with numerous risk disclosures.
25. It is clear throughout the transcript that the Defendant merely sent the
Plaintiff papers to sign with circles where to sign and where to initial, at no time were the
ramifications of the documents, the interpretation of the disclosures set forth in the
documents, or any relevant facts with regard to the investments being made by the
Defendant on the Plaintiff's behalf explained (see pages 39-43), and knowing full well
the Plaintiff's lack of education and inexperience with investing, he would not understand
the documents sent for his signature. The defendant acknowledges at page 57, that the
documents were mailed to the plaintiff confirming that he did not sit down with, or have
any lengthy phone conversations with the plaintiff to review and discuss the documents
and disclosures contained therein.
26. As can be seen on page 58, the numerous fees that were charged against
the Plaintiff's account included a fee of three quarters of a percent from Crossland and a
fee from Ace and a fee to the defendant.
7
7 of 16
FILED: LEWIS COUNTY CLERK 01/24/2022 03:40 PM INDEX NO. EFCA2017-000246
NYSCEF DOC. NO. 50 RECEIVED NYSCEF: 01/24/2022
27. There is no mathematical error in computation. The dollar amounts were
in the exhibits that were provided during the hearing and the testimony upon which the
arbitrator relied in arriving at the damage calculation.
28. The Plaintiff testified and confirms that he resides in Lyons Falls and is
seventy-two years of age and that his education is high school and has no degrees or
special licenses (Page 76-77).
29. Plaintiff, Ronnie Dorrity testified that they closed down the plant so he
lost his job and although his wife operated a liquor store, he began driving school busses
in 2002 and 2003 and made $14,000.00 (Page 78).
30. Plaintiff confirmed that he never had any experience with commodities,
trading or futures trading or currency trading, or negative calls or margins, or any other
high-risk trading as set forth in the documents that Defendant had the Plaintiff execute
(page 79 &80). Also, at page 80, the plaintiff confirmed that he was a conservative
investor and was not looking for any high-risk investment as disclosed in the commodity
trading documents (pgs. 79-81).
31. The Plaintiff stated that he understood that his nephew, the defendant, was
his investment advisor (pg. 82). The plaintiff went on to confirm that the defendant never
explained or reviewed of the paperwork that was sent to the plaintiff to sign (pg. 82-
any
84). Plaintiff merely signed or initialed where the Defendant placed circles or x's.
32. When asked whether the plaintiff knew or was aware there was other
investment advisors managing his money such as Ed Padone, his answer was no (pg. 86),
nor did the defendant ever explain the commission or fee charges (pg. 87). The
"x's"
documents that were initialed and had where to sign, the Plaintiff confirms he
8
8 of 16
FILED: LEWIS COUNTY CLERK 01/24/2022 03:40 PM INDEX NO. EFCA2017-000246
NYSCEF DOC. NO. 50 RECEIVED NYSCEF: 01/24/2022
merely signed the pages and they were not explained to him (pg. 88 & 89). None of the
documents were explained to the Plaintiff by the defendant.
33. As set forth on page 93, the plaintiff testified:
"I trusted my ñêphew, he was supposed to be looking out for me, helping
thought"
me, he knew what he was doing I
34. On pages 93 and 94, plaintiff affirms he did not know what a self-directed
IRA was, nor how it worked, only that he signed whatever papers the defendant
"x's"
forwarded to him with circles and where to sign and where to initial without any
explanation. the Plaintiff confirms he had no knowledge or understanding of a futures
contract, of an option on futures, of foreign currency trading, of a naked call, as set forth
in the documents submitted to the plaintiff by mail or fax from the defendant for
execution and signature.
35. At page 96 & 97, the plaintiff states that he totally relied on his nephew to
invest conservatively, similarly with one prior advisor who invested his money.
36. Pages 103 and 104, the defendant states that he invested nearly
$169,000.00 and that he received $6,600.00 and thereafter $1,855.34.
37. The statements that the plaintiff was able to retain demonstrate that
plaintiff lost $140,000.00 and the defendant at page 106 never advised his uncle that he
was suspended for acting as an agent with National Futures Association in 2013. The
plaintiff further testified that the first time he had knowledge that his ñephew was banned
was in 2016 when it was explained to him by his eldest daughter who had been
investigating her father's losses and activities of the defendant.
38. Plaintiff (p108), he had no idea what Alaron was, whether it was a stock, a
nianagemeñt company, etc., at the beginning the defendant claimed (almost like he had
9
9 of 16
FILED: LEWIS COUNTY CLERK 01/24/2022 03:40 PM INDEX NO. EFCA2017-000246
NYSCEF DOC. NO. 50 RECEIVED NYSCEF: 01/24/2022
inside information) he was familiar with the coinpãñy who was a good friend of his and it
was a good investment (see page 109).
39. Plaintiff disputes the testimony of the defendant with regard to the
defendant's claim that the plaintiff had half a million dollars in his accounts. Plaintiff
states that he never saw half a million in any of his accounts and that the total he had was
$250,000.00 on or about 1995, consistent with the decision of the National Futures
Association, the defendant ran the defendants account to about $265,000.00 but then lost
it all while the defendant made significant commissions. (p111)
40. After the plaintiff had contact with a Jacqueline Davis at Millennium
Trust, he was advised that the balance in his account was $1,855.34, that was all of the
money he had in the account (page 130). Plaintiff also contradicted the defendant nephew
on page 131 stating the plaintiff had no idea about $27,000.00 and no idea where it was.
The Trust representative confirmed there was no such money in the plaintiffs account
(pg. 131).
41. The plaintiff did not hire a lawyer initially because the defendant told him
there was no money, they will get nothing and that "Terry told me they owed so much
money with so many other people, big banks, and that he would be behind that. They will
all get the money first and "a little peon like me won't get anything so why should I
bother".
42. On page 139 the plaintiff confirmed in response to a question, "why didn't
you read it?", "I trust my nephew. My nephew sent
Preview
FILED: LEWIS COUNTY CLERK 01/24/2022 03:40 PM INDEX NO. EFCA2017-000246 NYSCEF DOC. NO. 50 RECEIVED NYSCEF: 01/24/2022 STATE OF NEW YORK SUPREME COURT COUNTY OF LEWIS RONNIE DORRITY, AFFIRMATION IN Plaintiffs, SUPPORT OF THE PETITION TO CONFIRM ARBITRATOR'S AWARD & OPPOSITION TO TERRY JAMES DORRITY, PETITION TO MODIFY OR Defendants. DISMISS AWARD Stuart E. Finer, Esq., an attorney duly admitted to the practice law in the State of New York affirms the following under the penalties of perjury: ARBITRATION WAS CONDUCTED PURSUANT TO DEFENDANTS REQUEST TO COMPELL ARBITRATION AND AN AWARD WAS GRANTED TO THE PLAINTIFF BASED UPON THE EVIDENCE PRESENTED 1. A hearing was conducted with regard to the factual issues in the arbitration of the claims by Ronnie Dorrity against his nephew, Terry James Dorrity, by the appointed guardian retired Supreme Court Judge, Samuel Hester. 2. After the trial, arbitrator Hester arrived at a decision in favor of the Plaintiff as outlined in the decision attached hereto and made apart hereof. 3. During the course of the trial, evidence was submitted to support the fact that Ronnie Dorrity was an unsophisticated investor who lost his job at the Lyons Falls Paper Mill when it closed and was hired as a part-time bus driver. At the same time, he was solicited by Terry Dorrity to turn over his pension funds with the promises of a much higher return in commodities and futures then he was earning with Fidelity. Ronnie 1 of 16 FILED: LEWIS COUNTY CLERK 01/24/2022 03:40 PM INDEX NO. EFCA2017-000246 NYSCEF DOC. NO. 50 RECEIVED NYSCEF: 01/24/2022 Dorrity had no experience in trading commodities, and in fact had limited experience with any investments as his 401K pension that was managed by the worldwide brokerage firm known as Fidelity. He clearly stated his strategy and goals were Conservative. 4. In arriving at the arbitrator's decision there was clear and convincing evidence that the nephew/Defendant was banned/terminated from ever providing commodities services through NFA (Nation Futures Association) for transactions against investors that mirrored the actions against the Plaintiff. Attached hereto is a copy of the Decision that removed the Defendant as a member and clearly showed the abusive practices by the Defendant where his customers made no money or lost money while the Defendant earned 1.8 million dollars in commissions. The Decision specifically references the Plaintiff Ronnie Dorrity. This is the same organization that as a result of the termination/suspension of the Defendant, refused to accept an arbitration claim against a banned broker and therefore the NFA rules of arbitration cannot apply. 5. This brings us to the argument now presented before the Court for a third time, requesting that the case be dismissed on Statute of Limitation grounds. Initially, counsel for the Defendant submitted a request for arbitration and a Motion to Dismiss the Plaintiffs claim for violating the two-year Statute of Limitations under the NFA rules. This Court refused to dismiss the Plaintiffs claim and instead referred the claim to arbitration. Both counsel by their consent agreed that retired Judge Hester would act as the arbitrator. The Statute of Limitations argument was for the second time made before Arbitrator Hester prior to the commencement of the hearing. Attached hereto and made a part hereof is the Arbitrator's decision on Motion to Dismiss on statute of limitations grounds. The motion was denied and the parties were directed to proceed with arbitration. 2 2 of 16 FILED: LEWIS COUNTY CLERK 01/24/2022 03:40 PM INDEX NO. EFCA2017-000246 NYSCEF DOC. NO. 50 RECEIVED NYSCEF: 01/24/2022 The Statute of Limitations dismissal is now the law of the case. The Defendant by consent, and upon his own motion, has agreed to arbitration. 6. Based upon the evidence presented to the Arbitrator, the Arbitrator was able to arrive at a damage amount as set forth on the various monthly statements that were presented to the Arbitrator. The damages were clearly set forth in the Arbitrator's award and as a result the Arbitrator made a determination with regard to the amount of damages and the application of appropriate interests. 7. It is interesting to note that both parties provided expert testimony and both experts came to the same conclusion that the investment strategy used by the Defendant for investing the Plaintiff's pension/savings proceeds was unsuitable. Based upon the fact that the investments were unsuitable, the arguments regarding the real estate crash or any other market slide was not the cause for the Plaintiff's losses. The Plaintiff's losses were clearly based upon unsuitable, high-risk investments that were inappropriate for the Plaintiff. 8. The Plaintiff's expert further set forth reasons why the Defendant was required to follow SEC "Know Your Customer Rules", and the manner in which the commodity/future investments were totally inappropriate for the Plaintiff. The fact that the investments were unsuitable and a breach of a fiduciary duty was the basis for the Arbitrator's conclusion that the Plaintiff was entitled to damages. 9. The Defendant also tries to rely upon the fact that the Plaintiff did not read the back of statements, did not read the small print, in fact did not read the notices raised in the Defendant's appeal because the Plaintiff stated that he relied totally on his nephew that he was not able to read and understand the notices in any event and repeatedly stated that his understanding of the investment strategy was "conservative". The Plaintiff further 3 3 of 16 FILED: LEWIS COUNTY CLERK 01/24/2022 03:40 PM INDEX NO. EFCA2017-000246 NYSCEF DOC. NO. 50 RECEIVED NYSCEF: 01/24/2022 stated on cross that had the defendant gone through the notices like defendant's attorney did paragraph by paragraph, Plaintiff would never have signed and consented to an investment strategy that stated he could lose all of his investment. 10. The finding by the Arbitrator ties into the fact that the broker/Defendant had a duty to represent, clearly and properly, the risks of the investments and was further obligated to make investments consistent with the Plaintiffs stated goals and objectives. Investments in futures and commodities was clearly inconsistent with the Plaintiffs stated goals and objectives and as a result the only one that made money was the Defendant and the only one who lost all of their money was the Plaintiff. 11. The Plaintiff also stated that had those notices been actually reviewed with the Plaintiff, the Plaintiff would have never consented to any of those investments, nor would the Plaintiff have accepted those high risks, in particular the risk that all of his money could be lost. 12. On its face it makes no sense that an unsophisticated individual with no investment experience and limited education would invest in conunodities and futures or would even understand a commodities or futures investment. The Arbitrator came to the conclusion that the Defendant broker/introducing broker failed to exercise appropriate duties to warn the Plaintiff of the risks associated with the investments. As a result, the Plaintiff lost all of his investment. 13. There is no testimony that the Plaintiff ever agreed to commodities and futures based upon his interest in a higher return than he was eaming with the Fidelity investment account. 14. Testimony sets forth that documents were sent to the Plaintiff with instructions where to sign and return without any explanation as to what the documents 4 4 of 16 FILED: LEWIS COUNTY CLERK 01/24/2022 03:40 PM INDEX NO. EFCA2017-000246 NYSCEF DOC. NO. 50 RECEIVED NYSCEF: 01/24/2022 meant, as to what the risks were or what the purpose of the document in direct contravention to the Defendant's handwritten statement that he would explain all the investments and would not make them without the Plaintiff's consent. 15. The Arbitrator also in the award set forth a formula for calculating interest over the various periods of time and the calculation was included in the Plaintiffs Petition to Confirm the Award. If the Court fmds that the Statutory interest of nine percent should apply to each of those past years for prejudgilieiit interest, as opposed to the formula set forth in the arbitrator decision, your Affirmant has no objection to applying the nine percent legal rate back to the dates in time as set forth in the arbitrator's decision. 16. Also, Defendant's claim that the SEC rules have no jurisdiction is also disputed by the Plaintiff's expert. DEFENDANT BREACHES FIDUCIARY RESPONSABILITY AND DAMAGES ARE APPROPRIATE 17. All that the Plaintiff knew was something called Alaron was on his statement and that it went from 144,000.00 to zero. The Defendant admits that page 14, the dollar amount he received and that which was in the accoüilt was 169,000.00 and that the client received $27,000.00 with a loss of $141,000.00. See page 14. (transcript page numbers) 18. Again, on page 65, Defendant admits that losses in accordance with the statement were $142,000.00. At pages 52 and 54 the Plaintiff admits that money transferred into the Plaintiffs Millennium account were $60,300.00 and $80,000.00 plus another $20,000.00 for a total of $160,300.00. 5 5 of 16 FILED: LEWIS COUNTY CLERK 01/24/2022 03:40 PM INDEX NO. EFCA2017-000246 NYSCEF DOC. NO. 50 RECEIVED NYSCEF: 01/24/2022 19. At all times Plaintiff believed that the nephew was managing the Plaintiffs money, because the statements showed how the results of the Defendant's management was still in the Plaintiffs account until it went to zero. The Plaintiff had no idea who the money was transferred to and that the Defendant misrepresented that he was managing the money when in fact the money manager was changed to Ed Padone (See page 34). This was never explained to the Plaintiff nor the money manager through Ace Investments, a person named Ud Chang, all were identified during the course of the where the Defendant admits that an entity called Crossland was the hearing testimony clearing firm and that a firm known as Ace made the investments page 58. Defendant was not managing the money in conservative investments but turned the funds over to different management firms, mainly Ace and Zeinith with two different money managers, which resulted in damages to the Plaintiff in the sum of $142,000.00. 20. See pages 61 and 62, the Defendant continued to receive commissions initially six percent or $4,800.00, and thereafter nine percent annually page 37. Clearly the arbitrator concluded that how in the world could the Plaintiff make money when the Defendant was taking nine percent of the assets as commission, meaning that the investment would have to have a return of at least nine percent to break even. 21. These are the same type of activities that resulted in the Defendant paying fines and being banned by the National Futures Association as a trader or advisor or introducing broker with the NFA. Defendant paid fines of $10,000.00 in the year 2000 and $9,000.00 in the year 2002 (See page 19), and agreed to be banned after the investigation by the NFA for eight years and would not be allowed back without paying $100,000.00 fine and a successful application to the NFA (See page 31). 6 6 of 16 FILED: LEWIS COUNTY CLERK 01/24/2022 03:40 PM INDEX NO. EFCA2017-000246 NYSCEF DOC. NO. 50 RECEIVED NYSCEF: 01/24/2022 22. Defendant never told his uncle that he was banned from trading with the NFA (34). 23. At all times the Defendant was licensed as an investment advisor in Pennsylvania and was never licensed in New York. However, the defendant solicited his uncle in New York and requested he provide other investors from New York, all a violation of his license. 24. The Defendant confirmed that he sent a letter and advised in quotes "I will soon" go over all the papers with you either way we will talk (18). The Defendant never went over any of the papers that were reviewed during the hearing that were signed by the Plaintiff with numerous risk disclosures. 25. It is clear throughout the transcript that the Defendant merely sent the Plaintiff papers to sign with circles where to sign and where to initial, at no time were the ramifications of the documents, the interpretation of the disclosures set forth in the documents, or any relevant facts with regard to the investments being made by the Defendant on the Plaintiff's behalf explained (see pages 39-43), and knowing full well the Plaintiff's lack of education and inexperience with investing, he would not understand the documents sent for his signature. The defendant acknowledges at page 57, that the documents were mailed to the plaintiff confirming that he did not sit down with, or have any lengthy phone conversations with the plaintiff to review and discuss the documents and disclosures contained therein. 26. As can be seen on page 58, the numerous fees that were charged against the Plaintiff's account included a fee of three quarters of a percent from Crossland and a fee from Ace and a fee to the defendant. 7 7 of 16 FILED: LEWIS COUNTY CLERK 01/24/2022 03:40 PM INDEX NO. EFCA2017-000246 NYSCEF DOC. NO. 50 RECEIVED NYSCEF: 01/24/2022 27. There is no mathematical error in computation. The dollar amounts were in the exhibits that were provided during the hearing and the testimony upon which the arbitrator relied in arriving at the damage calculation. 28. The Plaintiff testified and confirms that he resides in Lyons Falls and is seventy-two years of age and that his education is high school and has no degrees or special licenses (Page 76-77). 29. Plaintiff, Ronnie Dorrity testified that they closed down the plant so he lost his job and although his wife operated a liquor store, he began driving school busses in 2002 and 2003 and made $14,000.00 (Page 78). 30. Plaintiff confirmed that he never had any experience with commodities, trading or futures trading or currency trading, or negative calls or margins, or any other high-risk trading as set forth in the documents that Defendant had the Plaintiff execute (page 79 &80). Also, at page 80, the plaintiff confirmed that he was a conservative investor and was not looking for any high-risk investment as disclosed in the commodity trading documents (pgs. 79-81). 31. The Plaintiff stated that he understood that his nephew, the defendant, was his investment advisor (pg. 82). The plaintiff went on to confirm that the defendant never explained or reviewed of the paperwork that was sent to the plaintiff to sign (pg. 82- any 84). Plaintiff merely signed or initialed where the Defendant placed circles or x's. 32. When asked whether the plaintiff knew or was aware there was other investment advisors managing his money such as Ed Padone, his answer was no (pg. 86), nor did the defendant ever explain the commission or fee charges (pg. 87). The "x's" documents that were initialed and had where to sign, the Plaintiff confirms he 8 8 of 16 FILED: LEWIS COUNTY CLERK 01/24/2022 03:40 PM INDEX NO. EFCA2017-000246 NYSCEF DOC. NO. 50 RECEIVED NYSCEF: 01/24/2022 merely signed the pages and they were not explained to him (pg. 88 & 89). None of the documents were explained to the Plaintiff by the defendant. 33. As set forth on page 93, the plaintiff testified: "I trusted my ñêphew, he was supposed to be looking out for me, helping thought" me, he knew what he was doing I 34. On pages 93 and 94, plaintiff affirms he did not know what a self-directed IRA was, nor how it worked, only that he signed whatever papers the defendant "x's" forwarded to him with circles and where to sign and where to initial without any explanation. the Plaintiff confirms he had no knowledge or understanding of a futures contract, of an option on futures, of foreign currency trading, of a naked call, as set forth in the documents submitted to the plaintiff by mail or fax from the defendant for execution and signature. 35. At page 96 & 97, the plaintiff states that he totally relied on his nephew to invest conservatively, similarly with one prior advisor who invested his money. 36. Pages 103 and 104, the defendant states that he invested nearly $169,000.00 and that he received $6,600.00 and thereafter $1,855.34. 37. The statements that the plaintiff was able to retain demonstrate that plaintiff lost $140,000.00 and the defendant at page 106 never advised his uncle that he was suspended for acting as an agent with National Futures Association in 2013. The plaintiff further testified that the first time he had knowledge that his ñephew was banned was in 2016 when it was explained to him by his eldest daughter who had been investigating her father's losses and activities of the defendant. 38. Plaintiff (p108), he had no idea what Alaron was, whether it was a stock, a nianagemeñt company, etc., at the beginning the defendant claimed (almost like he had 9 9 of 16 FILED: LEWIS COUNTY CLERK 01/24/2022 03:40 PM INDEX NO. EFCA2017-000246 NYSCEF DOC. NO. 50 RECEIVED NYSCEF: 01/24/2022 inside information) he was familiar with the coinpãñy who was a good friend of his and it was a good investment (see page 109). 39. Plaintiff disputes the testimony of the defendant with regard to the defendant's claim that the plaintiff had half a million dollars in his accounts. Plaintiff states that he never saw half a million in any of his accounts and that the total he had was $250,000.00 on or about 1995, consistent with the decision of the National Futures Association, the defendant ran the defendants account to about $265,000.00 but then lost it all while the defendant made significant commissions. (p111) 40. After the plaintiff had contact with a Jacqueline Davis at Millennium Trust, he was advised that the balance in his account was $1,855.34, that was all of the money he had in the account (page 130). Plaintiff also contradicted the defendant nephew on page 131 stating the plaintiff had no idea about $27,000.00 and no idea where it was. The Trust representative confirmed there was no such money in the plaintiffs account (pg. 131). 41. The plaintiff did not hire a lawyer initially because the defendant told him there was no money, they will get nothing and that "Terry told me they owed so much money with so many other people, big banks, and that he would be behind that. They will all get the money first and "a little peon like me won't get anything so why should I bother". 42. On page 139 the plaintiff confirmed in response to a question, "why didn't you read it?", "I trust my nephew. My nephew sent