A Dallas-based law firm announced Wednesday that it has won a US$21.6 million jury verdict on behalf of an alternative investment advisory firm against RBC Capital Markets LLC, over allegations that the bank refused to settle a securities trade for the firm.

Lackey Hershman LLP reports that it secured a US$21,565,000 verdict for its client, Dallas-based Highland Capital Management, L.P. against RBC, which is part of the Royal Bank of Canada (TSX:RY), in a Dallas County court, following a seven-day trial. It says that it expects the judgment to rise to US$45 million when pre-judgment interest is added.

According to the firm, the case was based on RBC’s alleged refusal to settle a securities trade back in 2001. It says that Highland alleged that on March 14, 2001, RBC Capital Markets agreed to a trade involving Highland purchasing promissory notes from RBC with an aggregate face value of US$45.4 million for 52.5¢ on the dollar. However, Highland alleged that RBC ultimately refused to settle the trade, telling Highland on March 20, 2001, that it would not be able to deliver the securities as promised.

Almost a month later, on April 16, 2001, it was announced that Jones Apparel Group was acquiring the firm that had issued the notes (McNaughton Apparel Group, Inc.), and on June 19, 2001, the notes were paid off in full.

“The jury verdict is an important one for the securities industry because it reaffirms that oral agreements to purchase and sell securities remain as binding and enforceable under New York law today as they have for more than 200 years,” said Paul Lackey, the lead counsel for Highland.

“This was an incredibly important case to the securities industry. This verdict validates the integrity on which our markets rely,” said Mark Okada, co-founder and chief investment officer of Highland Capital.