Virginia H. Nesbit and the W. Wallace Nesbit Trust, Cross-Appellants v. Steve McNeil and Black & Company, Inc., Cross-Appellees

Virginia H. Nesbit and the W. Wallace Nesbit Trust (“plaintiffs”) brought this ac tion against Steve McNeil and Black & Company, Inc. (“defendants”) and alleged that the defendants had churned the plaintiffs’ investment accounts. Among other things, plaintiffs sought to recover for violations of the federal securities laws [Securities and Exchange Act of 1934 § 10(b), 15 U.S.C. § 78j(b), and Rule 10b-5, 17 C.F.R. § 240 .10b-5] and under the State of Oregon securities laws [Or.Rev.Stat. § 59.135 (1987)]. The district court directed a verdict against the plaintiffs on the Oregon securities law claim, and submitted the federal securities claim to the jury. The jury brought in a verdict against defendants, and awarded damages in the amount of the excess commissions generated by the churning of the plaintiffs’ accounts. The district court denied a motion for judgment notwithstanding the verdict, and entered judgment accordingly.

Defendants now appeal and claim that the district court erred because it did not permit the offset of trading gains against the excess commissions, because the evidence of churning was insufficient to support the verdict, and because the plaintiffs’ claims…