Brown v. Merrill Lynch, Pierce, Fenner & Smith, Inc.

Plaintiffs James and Helen Brown brought an action in negligence and fraud against the brokerage firm of Merrill Lynch, Pierce, Fenner & Smith, Inc., (Merrill Lynch) and its agents seeking to recover actual and punitive damages. Summary judgment was granted to the defendants by the District Court of Yellowstone County. Plaintiffs appeal.

In 1979 James Brown bought and sold gold coins at a profit of approximately $44,000. Brown learned from his brother-in-law that he might defer reporting the income from the gold for a year by means of a tax straddle. As neither Brown nor his wife were familiar…