Wedbush Securities is a FINRA registered broker-dealer founded in 1955.  It is primarily a West Coast firm, with headquarters in Los Angeles, California.

According to the firm’s FINRA Broker Report (CRD), Wedbush Securities has been the subject of numerous regulatory inquiries and customer complaints.

The regulatory inquiries (numbering over 40) have been brought by various regulatory bodies, including FINRA (formerly the NASD), the S.E.C., the NYSE Division of Enforcement, and numerous state regulatory bodies (Washington, Colorado, Georgia, New Jersey, Oregon, and Idaho).  These inquiries relate to various securities violations, including violations regarding market timing and supervisory failures.

Wedbush’s CRD also indicates that the firm has been the subject of over 40 arbitrations (customer complaints), with the firm in many cases being forced to pay customers damages as a result of its improper management.  These claims have related to various types of securities/ investments (municipal securities, mutual funds, stocks, bonds, options, and annuities) and have included claims for negligence, fraud, unsuitability, churning, excessive margin, breach of fiduciary duty, and misrepresentation.

If you have questions about investments you made with Wedbush Securities, The White Law Group may be able to help.  For a free consultation, call the firm at 312-238-9650.

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Boca Raton, Florida. With over 30 years of securities law experience, including experience working at FINRA (f/k/a the NASD) and the SEC, The White Law Group has the expertise to help investors defrauded in securities, investment and financial business transactions.

For more information on The White Law Group, please visit our website at http://www.whitesecuritieslaw.com.

Here are the statistics published by FINRA (for more information on these statistics, visit http://www.finra.org/ArbitrationMediation/AboutFINRADR/Statistics/index.htm

Arbitration Cases Served by Controversy Involved

Security Types Involved in Arbitration Cases

Results of Customer Claimant Arbitration Award Cases

Ultimately, the investor lost her entire life savings after several of her positions moved against her and TD Ameritrade started liquidating her account to meet her margin calls. It appears from our preliminary investigation that this investor’s circumstances would best be categorized as a “financial suicide.”

It is well settled law that investment professionals, including stock brokers, have a duty to refuse unsolicited transactions when the transactions are inappropriate or unsuitable for a customer based on the financial condition of that customer. Cohen, The Suitablity Doctrine: Defining Stockbrokers’ Professional Responsibilities , 1978 J. Corp. L. 533 (1978); In re Philips & Co. , 37 S.E.C. at 70 (representative’s knowing recommendation of unsuitable security not excused by customer’s belief that security was suitable); In re Powell & McGowan, Inc. , 41 S.E.C. 933 (1969)(registrant had obligation not to recommend a course of action even if he fully disclosed all risks to customer whose financial and physical condition made the recommendations unsuitable); In re Harold R. Fenocchio , ’34 Act Release No. 12194 (given the advanced age of customer, representative had a duty “to make a serious inquiry into the situation of the customer’s investments and to prevent the dissipation of the customer’s capital by excessive turnover”); In Board of Trustees v. Chicago Corp., No. 88-C-3855 (N.D. Ill. 1988) (1988 U.S. Dist. LEXIS 14031)( the court held that a broker had a duty to monitor a client’s investment decisions, which were effected by client’s trustee, and to advise client of soundness of the trustee’s decisions); Duffy v. Cavalier , 215 Cal. App. 3d 1517, 264 Cal. Rep. 3d 740 (1989) (court held that as a fiduciary, the broker had a duty to tell a client that the client’s investment objectives were improper and unsuitable and “to refrain from acting except upon the customers express orders”); Nobrega v. Futures Trading Group, Inc., [1999] Sec. L. Rep. (BNA) Vol. 31, No. 28, p. 950 (CFTC 1999) (broker sanctioned for failing to correct client’s “erroneous beliefs” about safety of commodities trading and failing to stop client from continued trading once aware of these erroneous beliefs).

It is also well established that a broker has a duty to provide adequate warnings about investment strategies particularly when trading on margin. See, e.g. Gochnauer v. A. G. Edwards & Co., 810 F.2d 1042 (11th Cir. 1987) (holding broker liable when he advised and assisted customers with conservative investment objectives in establishing a speculative options trading account); Beckstrom v. Parnell , 730 So.2d 942 (La. App. 1998)(imposing liability on broker for failure to warn elderly customer about high costs of switching mutual funds when broker aware of customer’s diminished capacity); Nulph v. First Security Investor Services, Inc., 1998 WL 1179858 (N.A.S.D. Nov. 19, 1998)( unsophisticated divorcee awarded $70,000 for failure of broker to warn of speculative information gathered from internet chat rooms and then placed trades on the telephone without any recommendations).

Under these circumstances, the broker has an affirmative duty to cut a customer off, and stop what has become to be known as “financial suicide.” See, e.g., J. Gross, Economic Suicide: A Primer for Securities Arbitration Lawyers, Securities Arbitration 2003 Vol. I at 387 (PLI 2003). See also, Problem Gambling in the Stock Market and Extent of Brokerage Firm Responsibility for Prevention, Marvin A. Steinberg. Ph.D., Connecticut Council on Compulsive Gambling, Judah J. Harris, J.D., Milford, Connecticut, 1994; Gambling and Problem Gambling in the Financial Markets, Marvin A. Steinberg, Ph.D., Connecticut Council on Problem Gambling, July, 1998; Investing and Gambling Problems, “Some Investors May Be At Risk For Gambling Out Of Control In The Stock Market And Other Financial Markets”; See also, Model Employer Management of a Case of Stock Market Gambling , Judah J. Harris, J.D., Milford, Connecticut, Marvin A. Steinberg, Ph.D., Connecticut Council on Compulsive Gambling, 1994.

If you have any information that would aid us in our investigation, we would appreciate your call. The Law Offices of David A. Carter, P.A. is a South Florida securities fraud, securities arbitration, investor protection, and Chapter 7 bankruptcy law firm based in Boca Raton. David Carter is a securities attorney that reviews securities fraud cases throughout the country and Florida, including securities fraud cases in Delray Beach, Boynton Beach, Wellington, Stuart, Vero Beach, Melbourne, Jupiter, and Orlando. To contact the Law Offices of David A. Carter, P.A., please call 561-750-6999, or email us at contact@carterpa.com. For more information about the Law Offices of David A. Carter, P.A., you can also visit our website at www.carterpa.com.