SEC Charges SoCal Broker Chad Wiegand

On June 9, 2015, The SEC announced that it had charged three men living in California with insider trading in the stock and options of Ardea Biosciences.

The SEC alleges that Michael J. Fefferman learned material nonpublic information as senior director of information technology at Ardea Biosciences, and tipped his brother-in-law Chad Wiegand, a stockbroker, in advance of major public announcements.

Chad Wiegand then purchased Ardea stock in various customer accounts based on the confidential information he received from Fefferman, and he tipped his friend and fellow stockbroker Akis  Eracleous so he could similarly buy stock on behalf of his customers.

Chad Wiegand has agreed to a settlement that is subject to court approval. Disgorgement, prejudgment interest, and penalties will be determined at a later date. Chad Wiegand and Akis Eracleous have agreed to be barred from the securities industry.

In a parallel action, the U.S. Attorney’s Office for the Southern District of California announced criminal charges against Chad Wiegand and Eracleous.

 

The above allegations contained in the SEC’s complaint have not been proven, and the issuance of a complaint represents the SEC’s initiation of a formal proceeding in which findings as to the allegations in the complaint have not been made, and does not represent a decision as to any of the allegations contained in the complaint.

 

Chad Wiegand registration and disciplinary history

In order to lawfully sell investments to the public, one must either be registered or exempt from registration. Chad Wiegand was  registered with:

12/2008 – 04/2013
NATIONAL PLANNING CORPORATION
07/2007 – 12/2008
AIG FINANCIAL ADVISORS, INC.
04/2007 – 07/2007
BROOKSTREET SECURITIES CORPORATION
03/1999 – 04/2007
FIRST WALL STREET CORP.According to FINRA’s CRD disclosure report, Chad Wiegand has been the subject of one regulatory investigation.

The Law Office of David Liebrader practices exclusively in the field of investment loss recovery. For the past 23 years, we have dedicated our law practice to assisting investors who have been victims of investment fraud via fraudulent and unsuitable investment transactions. During that time we have recovered money for over one thousand individuals, pension plans, trusts and companies. The recoveries we have obtained via judgments, awards and settlements on behalf of our clients exceed $40,000,000.

When investors contact our firm they can expect prompt attention, and a detailed analysis of their issues. Typical claims that we are asked to review involve “unsuitability (where a financial advisor makes investment recommendations that are inconsistent with a customer’s investment objectives), claims for “churning” (where a broker enters into an excessive number of trades for the purpose of generating commissions), claims involving illiquid investments such as private placements (I.e., real estate investment trusts, limited partnerships, equipment leasing and oil and gas drilling programs) as well as claims for violations of state securities laws, which often provide investors remedies like attorney’s fees and interest, if they are successful on the claim.

Since a Supreme Court ruling in the 1980s, most investment related disputes between brokerage firms and their customers have been filed in an arbitration forum hosted by FINRA Dispute Resolution. FINRA, along with the SEC, serves as a securities industry “watchdog” and regulator. Most brokerage firms require their clients to sign binding arbitration agreements, mandating that any disputes between them be arbitrated at FINRA.

Investors pursuing claims at FINRA typically advance claims related to suitability. FINRA rules require that all registered representatives make suitable investment recommendations to their clients. Other claims are based on negligence or breach of fiduciary duty, while another category includes claims based on misrepresentations and fraud. Most claims filed with FINRA are resolved within 15 months, and oftentimes, the cases are resolved via settlement or mediation in under a year.

FINRA’s rules require that all investment recommendations made by licensed financial advisors be suitable in light of a customer’s needs, objectives and risk tolerance. In addition, all registered representatives are required to be properly supervised, with periodic inspections and reviews by qualified supervisors, whose job it is to vigorously investigate suspicions of wrongdoing (red flags).

If you suspect that you have been the victim of investment fraud, or had a financial advisor recommend unsuitable investments to you, call us today for a free, confidential consultation at (702) 380-3131.