Attorney Jonathan Alpert is taking on Barnett Banks Inc. once again.
A suit he filed in a Tampa federal court last Friday accuses the Jacksonville-based bank of misleading an elderly customer when selling her a mutual fund at a bank branch located in a retirement home. The suit, which seeks class action status, is the third that Mr. Alpert has filed against Barnett in a year.
"Barnett and others need to do things right, so we can get to the next issue," said Mr. Alpert, a partner at Alpert, Barker & Calcutt in Tampa. A vigorous litigant against banks for what he calls deceptive sales practices at their brokerages, he also is pursuing cases against NationsBank Corp. and Great Western Financial Corp.
According to the most recent Barnett filing, in U.S. District Court for the Middle District of Florida, plaintiff Justine Brady thought she was dealing with a bank employee, not a broker, when she agreed to invest $50,000 in the Franklin Income Fund. Ms. Brady said she never received a prospectus for the fund and was unaware the investment was not insured and would cost her sales fees.
The suit also alleges that without Ms. Brady's permission the broker took an additional $5,000 from her Barnett savings account to buy more mutual fund shares.
Mr. Alpert filed a similar suit in Florida state court last year. The most recent filing allows Barnett brokerage customers in Georgia to join the suit should it receive class action status.
Mr. Alpert also filed suit against Barnett last year for selling securities in bank branches not registered for securities sales.
A Barnett spokeswoman said the bank will vigorously defend its reputation against all of the charges. The bank believes all the charges against it are "absolutely without merit," she said.
Among the charges against Barnett: the bank's brokers had to meet sales quotas or be fired, and the brokers did not fully disclose the potential risk of investing in mutual funds, annuities, and other non-insured investment products.
Mr. Alpert said he doesn't hold banks entirely responsible for their trouble selling investments in branches. Regulators should look at bank brokerage sales practices more closely, he said, and reevaluate current regulations-which may not be stringent enough to protect less-than-savvy consumers.
"Twenty-five years from now, when customers are used to banks having mutual funds and bank products, and they didn't live in the Glass-Steagall era, you won't have these problems," Mr. Alpert told bankers at an industry conference last week.