A Financial Industry Regulatory Authority (FINRA) arbitration panel says Wedbush Securities Incorporated must pay Karen E. Ray $233,000 in damages. Ray had accused the brokerage firm of numerous causes of action, including negligence, purposely negligent misrepresentations, and violating FINRA Rules of Fair Practices.
Rays case isn’t the first one against the broker-dealer. FINRA’s broker report on the financial firm noted that Wedbush has been at the center of a number of customer complaints and over 40 regulatory inquiries brought by the Securities and Exchange Commission, FINRA (previously NASD), the NYSE Division of Enforcement, as well as regulatory bodies in Colorado, Washington, New Jersey, Georgia, Idaho, and Oregon.
Among the allegations are those involving supervisory failures and market timing. The broker report also noted that Wedbush had received over 40 securities arbitration claims by customers alleging unsuitability, negligence, excessive margin, churning, misrepresentation, and/or breach of fiduciary duty. Their cases involved different kinds of securities, such as mutual funds, bonds, stocks, municipal securities, annuities, and options.
In July 2007, our stockbroker fraud blog posted a story about a securities complaint against Wedbush filed by a group of nuns. The Sisters of St. Joseph of Carondelet contended that they lost $1 million because Wedbush placed their money in mortgage-backed CMO securities.
In Ray’s securities arbitration case, the FINRA panel is ordering Wedbush to pay her $177,791 in compensatory damages. Wedbush also must pay $42,026 in lawyer fees, $5,000 for the Claimant’s expert witness fee, and $3,604 in costs.
Related Blog Post:
Wedbush Hit with Nun’s Complaint over CMO’s – May Have More Than Brokers in Common with Brookstreet, July 18, 2007