Investor Awarded $111 Million in Trading Case Against Bear Stearns
By Colleen DeBaise, Staff Reporter
NEW YORK -(Dow Jones)- A federal jury Tuesday awarded $111.5 million in damages Tuesday to a Canadian
investor who accused Bear Stearns Cos. of making unauthorized currency trades in his account.
Henryk de Kwiatkowski, 76, claimed Bear Stearns (BSC) lost $300 million of his fortune and squandered a trust
account he set up for his children and grandchildren. During the two-week trial, he testified that the New
York-based securities firm and his former broker, Albert J. Sabini, failed to warn him about the risks of
foreign-currency trading.
The jury dismissed the claims against Sabini, a managing director at the firm, but found Bear Stearns negligent for
allowing de Kwiatkowski to buy billions of dollars worth of foreign-currency futures contracts.
Company spokeswoman Hannah Burns said the firm planned to appeal the ruling, which Bear Sterns feels was wrong.
During the trial, Bear Stearns attorney Jim Linn said de Kwiatkowski had been warned of the speculative risks involved when he opened his
account. He portrayed de Kwiatkowski as an "absolute gambler" who made bad trading decisions even as losses mounted.
Paul J. Curran, de Kwiatkowski's attorney, told the jury that his client suffered $230 million in currency-trading losses in a matter of weeks in
1995. He said de Kwiatkowski was persuaded to move about half of his currency-trading account to the unregulated over-the-counter
currency market, and that Bear Stearns allowed his losses to grow without margin calls.
Eventually, the firm liquidated the trust account to pay back losses, leaving nothing in the account for his heirs, Curran said.
While finding Bear Stearns negligent, the jury didn't find that the firm breached its fiduciary duties to de Kwiatkowski, which could have made
Bear Stearns liable for even more damages.
Outside the courtroom, de Kwiatkowksi said he was pleased with the jury's verdict.
De Kwiatkowski, who lives in the Bahamas, is a native of Poland who fled from the Nazis and built a fortune in the airplane leasing and sales
business. He owns Calumet Farm, a Kentucky thoroughbred horse-breeding farm.
(Compiled from Dow Jones Newswires and other sources)
Copyright (c) 2000 Dow Jones & Company, Inc.
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