Philip Grossman is reported to have committed suicide in September 2009, after investment losses amounted to nearly $400,000.
According to the Boston Globe report, Philip and Gail Grossman were longtime clients of Bank of America, and had previously limited their investments to secured certificates of deposit—investments that may have limited earning potential, but always protected the principal.
However, in 2007, the Grossmans were recruited by a bank branch manager to meet with a broker with regard to investing. According to the report, the family claims they were advised that they could earn more from their investments, without taking on more risk.
The family claims that half of the investment principal was to be invested in conservative bonds. However, the reality appeared to prove otherwise, with the funds winding up in complex investments including structured notes and closed-end funds that languished when the market dropped. The other half of the Grossmans' funds, invested in stock funds, fell even more sharply than the stock market, according to the report.
The Grossmans—both in their sixties—lost $293,000 in stocks and $105,000 in bonds for a total of $398,000. Philip Grossman reportedly grew despondent over the losses and took his own life in 2009. According to the Boston Globe report, the Grossman family attempted to sue Bank of America alleging negligent misrepresentation and breach of fiduciary duty, as well as negligent infliction of emotional distress and wrongful death. However, the case was dismissed by a federal judge and deferred to stockbroker arbitration.
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The stockbroker, Clifton Spinney, is reported to have no disciplinary matters disclosed on his public broker record.
An investigation is underway, overseen by Secretary of State William F. Galvin, to determine whether or not the broker may have been guilty of stockbroker fraud by potentially misleading the Grossmans or inappropriately investing their money given the Grossman's age and prior investment risk profile. An attorney representing the Grossmans would also like to see stockbroker arbitration deemed an option, rather than mandatory, in such situations.