In July, 2017, a FINRA arbitrator panel sitting in Los Angeles, CA issued a $1,797,100 binding arbitration award against Wedbush Securities a FINRA registered broker dealer. The award included nearly $1.2 million in punitive damages pursuant to the California Elder Abuse and Dependent Adult Act. The panel also added nearly $300,000 in attorney’s fees.
The underlying matter involved structured products and steepeners, synthetic securities that allow speculators to bet on the direction of interest rates. The panel also made an affirmative finding that Wedbush Securities and broker Mark Augusta engaged in unauthorized trading in the Claimant’s account. Among the securities at issue were Citigroup FDG Medium Term, Lloyds TSB Bank Steepner Note, SG Structured Prods Medium Term and Citibank NA Principal Protected MLCD Quarterly Notes
After a seven day arbitration hearing over March and May, 2017, the arbitrators rendered their decision, and awarded the Claimant $250,000 in compensatory damages, with the remainder being commission disgorgement, punitive damages, attorney’s fees and costs. The panel found Wedbush solely liable, based on Wedbush’s obligation to indemnify Mark Augusta, and no portion of the award is owed by Augusta. The panel, nevertheless found that both Wedbush Securities and Mark Augusta engaged in “improper conduct.” Augusta left Wedbush in May, 2015 after four years with the firm. He is now registered with Hilltop Securities in Del Mar, California.