June 9, 2000
Dow Jones News Service
NEW YORK (Dow Jones) — Klayman & Lazarus LLP, on behalf of three customers, filed suit against PaineWebber Group Inc.’s (PWJ) PaineWebber Inc. unit before the National Association of Securities Dealers Inc. for alleged unlawful conduct at its Mitchell Field, N.Y., branch office.
The Mitchell Field office is part of PaineWebber’s Garden City retail complex, which is one of three top producing branch offices, the law firm said in a press release Friday.
The suit alleges that PaineWebber, through its registered representative, Michael D. Prokop, took advantage of a 17-year relationship with the plaintiffs to engage in “unsuitable and excessive trading.”
The claim seeks compensatory and punitive damages of $12.6 million for violations of the Securities and Exchange Act of 1934 and New Jersey Securities laws, common law fraud, breach of contractual and fiduciaries duties and gross negligence.
The claim alleges that PaineWebber’s Mitchell Field branch office engaged in systematic and pervasive fraud.
According to Klayman & Lazarus, Martin Kiffel, a broker at the Mitchell Field branch office, was fired on March 15, 1999, after admitting to misappropriating funds from clients.
Subsequently, the U.S. Attorney’s Office for the Eastern District of New York began an investigation and Kiffel pleaded guilty to a change of federal wire fraud, the law firm said.
Web site: http://www.nasd-law.com