FINRA Panel Scorches Wedbush Broker's Conduct Saying It Borders On Criminal Misconduct And Awards $2.8M
A Los Angeles CA Financial Industry Regulatory Authority (FINRA) arbitration panel has slammed Wedbush Securities Incorporated, its Founder and President Edward Wedbush and Debbie Michelle Saleh for $2,865,885 in compensatory damages, interest, special damages, punitive damages, attorneys’ fees and costs.
The Statement of Claim was filed in the case in July 2009 alleging various causes of action, including breach of fiduciary duty, negligent misrepresentation, fraud and intentional misrepresentation and/or omissions, failure to supervise, unsuitable transactions, unauthorized transactions, churning, elder abuse and emotional distress, among others. All of the causes of action related to a series of transactions involving unspecified variable annuities. The Claimants sought at least $1,000,000 in compensatory damages, in addition to interest, special damages for emotional distress, punitive damages, attorneys’ fees and costs.
The Wedbush broker, Debbie Michelle Saleh did not file an answer to the Statement of Claim, nor did she appear at the evidentiary hearing. The arbitration panel concluded that she had in all things been properly served and was notified of the claims made against her, including the dates and times of the hearings and she voluntarily decided not to attend. Therefore, the hearing was conducted in normal fashion without her appearance.
At the conclusion of the twelve (12) day evidentiary hearing, the FINRA arbitration panel retired into executive session to review all of the oral and documentary evidence presented at the hearing. Thereafter, the panel decided that: Respondents Saleh and Wedbush Securities were jointly and severally liable to the Claimants and ordered them to pay $470,885 in compensatory damages; Respondents Saleh and Wedbush Securities were jointly and severally liable to the Claimants and ordered them to pay interest on the $470,885 at a rate of 10% per annum from September 30, 2008 until the award is paid in full; Respondent Saleh is solely liable for and shall pay the Claimants $500,000 in special damages for emotional distress; Respondent Wedbush Securities is solely liable for and shall pay the Claimants $300,000 in special damages for emotional distress; Respondent Edward Wedbush is solely liable for and shall pay Claimants $200,000 in special damages for emotional distress; Respondent is solely liable for and shall pay Claimants $1,000,000 in punitive damages pursuant to California’s Elder Abuse and Adult Civil Protective Act, Welfare and Institutions Code, Section 15600, et seq.; Respondents Saleh and Wedbush Securities are jointly and severally liable to the Claimants for attorneys’ fees in the amount of $390,000 pursuant to the California Welfare and Institutions Code, Section 15657.5; Respondents Saleh and Wedbush Securities are jointly and severally liable to the Claimants for $5,000 in costs.
Finally, the arbitration panel in the emphasized its disdain for the conduct of Ms. Debbie Michelle Saleh, Wedbush’s broker. The panel “determined that Respondent Saleh’s conduct was premeditated, egregious and unconscionable and part of a plan or scheme to defraud her customers. Respondent Saleh’s actions, including forging the client’s signature on various documents, making gross misrepresentations about the securities in the client’s account and the value of those securities, providing the client with false monthly account statements and executing unauthorized redemptions and/or partial withdrawals in the client’s annuities in violation of her fiduciary duties. Respondent Saleh’s conduct certainly borders on criminal misconduct, if not actually elevating her actions to actual criminal misconduct.”
In its final act, the panel assessed 100% of the forum fees for the arbitration against Wedbush Securities in the amount of $33,300. (FINRA# 09-04522; Rick Cooper, The Estate of Lauretta Kupperman, Kuppeman Family Limited Partnership v. Debbie Michelle Saleh, Wedbush Morgan Securities Inc., Wells Fargo Advisors LLC f/k/a Wachovia Securities LLC f/k/a First Union Securities and Edward W. Wedbush).
This is not the first case against the broker-dealer or its broker, Ms. Saleh. FINRA’s BrokerCheck report on the firm shows that Wedbush has been the focus of 52 arbitrations and 53 regulatory events, many of which were related to the failure to supervise. Debbie Michelle Saleh has been the focus of 10 customer complaints, 4 investigations and one regulatory event permanently barring her from associating with any FINRA member in any capacity.
If you were a customer of Debbie Michelle Saleh and Wedbush Securities, please contact our securities law firm at 1-800-259-9010 for a confidential evaluation of your potential claims.