Defense Jury Victory

Steptoe won a defense jury verdict for our client, Williams de Broë, that was sued by its US clearing agent, Fiduciary Trust Company, for indemnification as a third-party defendant concerning a December 2001 trade for 350,000 Kmart shares.  

The case was tried in the New York Supreme Court, and the jury took only two hours to reach a unanimous verdict on all four claims.  Fiduciary settled the trade without instructions from Wms. de Broë, or any other Fiduciary client, and held the trade in a Fiduciary suspense account until May 2002, well after the shares had lost $1.7 million in value due to Kmart's bankruptcy.   When in May 2002 Fiduciary first contacted Wms. de Broë regarding this trade, Wms. de Broë immediately told Fiduciary it had no knowledge of the trade and no client instructions to settle that trade.  Fiduciary then reclaimed the much-devalued Kmart shares to Knight Securities, and Knight sued Fiduciary for the loss on the trade.  Wms. de Broë was brought into the suit as a third-party defendant by Fiduciary.  While the main action between Knight and Fiduciary settled, the third-party action against Wms. de Broë remained and went to trial.  Wms. de Broë maintained that it bore no responsibility for the Kmart trade, because Fiduciary, as a clearing agent, is bound never to settle a trade on behalf of its client without specific instructions from that client.  The jury verdict agreed, vindicating that position.

Wms. de Broë is a U.K.-based securities brokerage firm.