Wedbush Securities to pay $1.4 Million
According to reports, a FINRA Panel hit Wedbush Securities hard this week, ordering the firm to pay $1.4 million in damages and commission disgorgement to a couple who invested in long-term municipal bonds and structured certificates of deposit.
FINRA also ordered Wedbush Securities to pay the CA couple’s former broker almost $60,000 of lawyers’ fees and costs, upholding his claim for indemnification despite finding him and Wedbush liable for unauthorized trading and violation of California’s elder abuse statute.
The Financial Industry Regulatory Authority’s arbitration award was beyond what the claimants initially sought.
The three-person FINRA arbitration panel reportedly ordered the firm to pay the couple $1.1 million of punitive damages, reimburse them $110,000 in commissions and cover their legal bill of $277,691 and their almost $29,000 of their arbitration costs.
The arbitrators also awarded the clients $250,000 in compensatory damages. They had sought $247,000 of general and compensatory damages, commissions covering the life of their accounts at Wedbush and unspecified punitive damages.
The award did not include payment for “lost opportunity costs” that the couple sought. The panel said it calculated the $1.1 million punitive damage award under terms of California’s Elder Abuse and Adult Civil Protective Act.
Although FINRA awarded the broker $110,000 for legal fees and costs related to the case, they deducted $50,172 from the amount because of allegedly “improper conduct”. The broker and Wedbush Securities were both named as respondents in the complaint.
While muni bonds and CDs are generally viewed as conservative investment classes, the ones traded by the broker for the couple allegedly included structured instruments with derivative features, according to reports.
This information, which is publicly available on FINRA’s website has been provided by The White Law Group.
If you have questions about investments you made with Wedbush Securities, the securities attorneys of The White Law Group may be able to help you. To speak with a securities attorney, please call 888-637-5510.
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