Articles Tagged with Unauthorized trades

The U.S. Court of Appeals for the Seventh Circuit is rejecting the appeal filed by stockbroker Kevin Wells, who was found liable for making unauthorized trades of Cyberonics Inc. (CYBX) in a customer’s account. In an initial default judgment, the customer, plaintiff William Wehrs, was awarded approximately $49,861 in damages.

Per the court, Wehrs sued Wells after the alleged unauthorized trades occurred and cost him “significant losses.” When Wells did not appear in court or respond to the securities fraud lawsuit, a default judgment was entered in Wehrs’s favor. Meantime, Wells’ supervisor and his financial firm chose to settle with Wehrs.

Following the default judgment, Wells filed an appeal, challenging the decision by the district court to deny his motion to vacate the default judgment as it pertains to liability. He also contended that the district court abused its discretion when it did not consider evidence that he believes demonstrates he not the proximate cause of a large amount of the losses that Wehrs suffered.