Kenning and Carpenter worked for Dean Witter Reynolds. They told over 100 clients (including Plaintiff Henderson) that, as Dean Witter employees, they had access to discounted municipal bonds and would buy them on behalf of "special customers." The "special customers" would pay Kenning or Carpenter directly, who would issue promissory notes in return. In fact, Kenning was using the money to fund his own trading. Kenning's manager and Dean Witter's compliance department apparently turned a blind eye to the suspicious account activity in Kenning and Carpenter's personal accounts because it was generating substantial commissions for the company. Harrison was awarded a judgment against Dean Whitter. Dean Witter appealed, claiming because they had compliance rules and procedures, and neither directly nor indirectly induced the acts, they should not be liable for Henderson's losses.
Full case and case summary are also available at: http://www.mlmlegal.com/legal-cases/Harrison_v_DeanWhitterReynoldsInc.php
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