Martellaro agrees to pay $5,000; case continues
“It is a piddly amount compared to what Mr. Ferrier lost,” said Paradise attorney Joseph Earley, who is representing Charles Ferrier and his family. The 80-something retired welder alleged that he intended to invest his $60,000 life savings in low-risk ventures, but instead an FASG broker racked up commissions while quickly buying and selling stock several times—"churning,” in stock-speak.
Martellaro’s local attorney on the case, Ken Baker, said that when the plaintiff’s attorney offered to settle with Martellaro for $10,000, he countered with $5,000 and Martellaro agreed to “get rid of it and move on.”
“It just cost less to settle for $5,000 at this point in time,” Baker said, adding that Martellaro didn’t do anything wrong but the case was taking up time and was a “nuisance.” Judge Steven Howell entered the judgment in favor of Ferrier on Feb. 27.
Earley said that although the agreement gets Martellaro out of the suit, it would proceed against co-defendant Ted Bryson, who was branch manager at the Chico office where Ferrier invested. The other defendant, FASG, has since shut down, and the First Securities USA chain that Martellaro later opened has been sold to a Southern California firm.
The trial date for the other defendants in the civil suit is set for April 22.
Ferrier is only one of dozens of people in California, Florida and other states who claim the FASG brokers did them wrong, sinking their money into high-risk stocks against their desires. One of the investments—Towers Financial Corporation—ended up the target of criminal investigations.
At one time, Martellaro had more than 500 stockbrokers in 42 states working for him. Now, he’s fending off several lawsuits and in recent years was ordered to pay more than $1 million in settlements, damages and legal fees to other investors who say he should have done a better job of watching his brokers.
Earley said that his client hasn’t actually received the $5,000 Martellaro promised, but that’s how these things work. "We join a very non-exclusive group without high expectations."