Brothers win $1.8m in day trading case

Two Los Angeles brothers have been awarded $1.8m (£1.1m) against Merrill Lynch in a complaint that alleged the investment bank had "improperly introduced" them to day trading.

The award, made by an arbitration hearing of the National Association of Securities Dealers, may encourage others who lost money during the day trading boom, which is closely associated with the stock market excesses of the dotcom years.

During the late 90s the promise of big rewards from the rapid buying and selling of shares lured millions of inexperienced investors into day trading.

The brothers, Ralph and Irving Rubenstein, claimed they had lost millions of dollars and were seeking $15m. Their lawyer, Jeffrey Riffer, said neither had much experience of the stock markets and previously stuck to a policy of buying for the long term.

He also alleged that Merrill had failed to advise them on diversifying their portfolio.

The brothers had sold a business to promotional products firm HA-LO Industries in 1998 for $57m in shares and kept most of their assets in HA-LO stock, which filed for bankruptcy in July 2001.

Merrill contended that it had given the brothers advice about diversifying out of HA-LO stock, which they chose to ignore.

The bank said: "We're disappointed with the panel's decision. Mr Ralph Rubenstein was an extremely aggressive trader and we note that the panel's decision awarded less than a tenth of the amount that Mr Rubenstein was seeking."

Ralph Rubenstein was awarded $896,400. His brother gained $837,000 and two family trusts received a total of $66,600.