claim that a broker deceived him into buying stock in a company he had holdings in, and was trying to get rid of, was upheld by arbitration.

And $750,000 of the amount Smith Barney Inc. and its broker was ordered to pay Robert Farmer was in punitive damages -- a rare occurrence in securities cases before the National Association of Securities Dealers.

The news came in an article published in The Wall Street Journal earlier this week.

When contacted last night at his home in Paget, Mr. Farmer said he would "rather not comment on the litigation'', adding that the "verdict speaks for itself''.

Arbitration is mandatory before the NASD, and damages are usually limited to what an investor has lost, plus interest.

Of the more than $40 million in total damage awards handed out by the NASD last year, only 13.5 percent were in punitive damages.

However, in its decision in the case against Smith Barney, the arbitration panel didn't say why it believed punitive damages were warranted, continued the article.

According to a brief summary of the case, Smith Barney account executive Philip Consolo allegedly persuaded Mr. Farmer to buy shares of a biotechnology company, Cambridge Biotech Corp.

The report said Mr. Farmer alleged that Consolo and his family were heavily invested in Cambridge Biotech at the time but wanted out of the stock.

Mr. Farmer also claimed that he did not know Smith Barney had placed the stock on a "no-buy'' restriction.

To sidestep the restriction, Consolo allegedly advised Farmer in the spring and summer of 1993 to make the purchases "at a firm other than'' New York-based Smith Barney.

In his complaint, Mr. Farmer alleged that Mr. Consolo was using him to maintain Cambridge Biotech's share price while he and his family quietly dumped their holding.

Mr. Farmer's lawyer, Michael Hanzman, told the Wall Street Journal that his client bought 68,000 shares at a total cost of about $450,000 while Mr.

Consolo got rid of 400,000 shares valued at about $3.5 million.

Mr. Farmer later sold his shares for about half of what he paid for them, suffering a total loss of $204,115.

A spokesman for Smith Barney said the company "strongly disagreed with the award'' but had no further comment. Under the rules at NASD, arbitrators' findings are final.

Mr. Hanzman said he had argued that Smith Barney knew their broker was over concentrated in the stock and that his clients were going outside the firm to buy shares while he was selling his.

Of the punitive damage amount, $250,000 was assessed against Consolo and $500,000 against Smith Barney.