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No one questions financial adviser Jeffrey Pickett’s good intentions — it’s his poor judgment that could cost Prudential Securities more than $260 million. A Marion County, Ohio, jury last week awarded 300 plaintiffs what is believed to be a record judgment against a brokerage firm after Pickett admitted selling $40 million in stocks without his clients’ permission. Four years ago, believing that a combination of overvalued stocks, the failure of a major hedge fund, international economic turmoil and fallout from the Monica Lewinsky scandal would cause a historic stock market crash, Pickett shifted $40 million from stocks his retiree clients held to low-risk money market accounts, his lawyer, Michael Ungar, said. The sell-off involved about 2,600 trades made without commission — but also without the required consent of his clients, all sides agreed. Ungar said Pickett was so convinced that the crash was imminent that he didn’t feel he had time to get all 300 clients’ consent and he didn’t want to play favorites by contacting only certain clients. “He had as pure a motivation as one could hope to hear out of a broker,” Ungar said, adding, “If he had done what he did 16 months later, the plaintiffs would be holding a parade for him.” Instead, Pickett’s misguided attempt to protect his clients’ assets cost him his job. “In his heart, he thought he was going to be a hero,” said Scott Starr, lead counsel for the plaintiffs. “Jeff Pickett testified he made a terrible mistake.” But Starr laid much of the blame on Prudential for failing to make his clients whole by putting their money back into the stocks, which, contrary to Pickett’s instinct, rose precipitously. He said Prudential’s refusal to undo Pickett’s blunder cost his clients millions of dollars. “The jury believed that Prudential was unwilling to do the right thing because it became too expensive,” Starr said. He added that the Security Class Action Service told him the $261.7 million award was the largest ever against a brokerage firm. A Prudential spokesman said the firm “believes that the damages were not legally justified and we plan to ask the judge to put them aside.” Prudential’s lawyers did not return a call seeking comment. Plaintiffs’ attorneys: Scott Starr (lead counsel), Austen, Tribbett, Myers and Miller, Logansport, Ind.; Thomas A. Hargett (co-counsel), Maddox Hargett & Caruso, Indianapolis; David P. Meyer, Columbus, Ohio. Defense attorneys: (for Prudential) Skip Keesal, Terry Ross and Stacey Garrett, Keesal, Young & Logan, Long Beach, Calif.; (for Jeffrey Pickett) Michael Ungar, Ulmer & Berne, Cleveland.

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