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Wedbush Securities and Former Financial Advisor Mark Augusta Ordered to Pay $1.4 Million in Elder Abuse Case

Posted on Thursday, August 3rd, 2017 at 2:33 pm    

Erez Law is currently investigating the former Wedbush Securities financial advisor Mark Augusta (CRD# 1333913) regarding elder abuse. Augusta has been registered with Hilltop Securities in Del Mar, California since May 2015. Previously, Augusta was registered with Wedbush Securities Inc. in Solana Beach, California from 2011 to 2015, when he resigned following, “Registered representative resigned as a customer complaint was filed against him.”

In July 2017, a FINRA arbitration panel ordered Wedbush Securities to pay $1.4 million in damages and commission disgorgement to a couple (87 and 91 years of age) who suffered losses due to unauthorized trading and investments in long-term municipal bonds and structured certificates of deposit (CDs), which included structured instruments with derivatives features. This investment strategy was unsuitable for the elderly clients and thus violated California’s Elder Abuse and Adult Civil Protective Act. The firm was also ordered to pay back $60,000 in lawyer fees. As part of the decision, Augusta was awarded $110,000 for legal fees and costs related to the case, however $50,172 was deducted due to Augusta’s improper conduct.

Augusta has been the subject of 15 customer complaints between 2000 and 2016, according to his CRD report:

October 2016. “Customer alleges poor recommendation with respect to the purchase of a swap rate linked certificate of deposit. Correspondence was subsequently received on June 9, 2017 with an additional suitability claim specific to a hold recommendation alleged by the claimant.” The customer is seeking $33,648 in damages and the case is currently pending.

January 2016. “Customer alleges the purchase of ten Chino Hills CA 2.625% due 09/01/2024 bonds in October 2015 was unauthorized.” The customer sought $10,000 in damages and the case was settled for $150.

May 2015. “On behalf of the client, cpa with written authorization claims the client’s investments were unsuitable for their age and stated investment objectives. August 2015 update: settlement demand letter received by client’s attorney lists the following allegations: breach of fiduciary duty; unsuitable recommendations; constructive fraud, common law fraud, and fraud by material misrepresentations/omissions; unjust enrichment; and financial elder abuse.”

November 2001. “Claimants allege fraud, misrepresentation, and breach of ficudiary (sp) duty with numerous purchases of municipal bond issues including, among others, Danforth Health Facilities, purchased first in December 1996; Tarrant County (St. Joseph), purchased first in june 1997; City of Mexico Beach (seminole), purchased first in December 1998; County of Shelby TN (Jackson Avenue Apts), purchased first in July 1999; Beech Grove Economic Development Revenue Bonds, purchased first in October 1997.” The customer sought $3.3 million in damages. “The United States Bankruptcy Court, Southern District of California, ordered on 8/7/2004 that Mr. Augusta, be granted a discharge from debts against him. Claims made by named claimants were included in the discharge order.”

April 2001. “Allegations of negligence, breach of fiduciary responsibility, failure to supervise and fraud in regard to the solicitation of high yield bonds both corporate and municipal which have defaulted. Municipal bonds include Heritage (Danforth, Tarrant county, Desert Hot Springs and Chicago Health Facilities), Beech Grove Eco. Devel., Tuopelo, MS and various corporate bonds (Service Merchandise, Boston Chicken and Globalstar Telecommunications).” The customer sought $229,256 in damages. “The United States Bankruptcy Court, Southern District of California, ordered on 8/7/2004 that Mr. Augusta, be granted a discharge from debts against him. Claims made by named claimants were included in the discharge order.”

April 2001. “Allegations of negligent misrepesentation (sp), unsuitability, fraud deceit, ommission (sp) of fact, breach of fiduciary duty in regard to the sale of municipal (Heritage, Jackson County) and corporate bonds (Boston Chicken and Service Merchandise).” The customer sought $514,845 in damages. “The United States Bankruptcy Court, Southern District of California, ordered on 8/7/2004 that Mr. Augusta, be granted a discharge from debts against him. Claims made by named claimants were included in the discharge order.”

December 2000. “Misrepresentation of unrated bonds as safe investments. Fraud in regard to the mistatement (sp) of price of unrated bonds on the monthly statement. Negligence in regard to recommending high yield bonds which were unsuitable for elderly clients risk adverse (sp) individuals.” The customer sought $500,000 in damages. “The United States Bankruptcy Court, Southern District of California, ordered on 8/7/2004 that Mr. Augusta, be granted a discharge from debts against him. Claims made by named claimants were included in the discharge order.”

October 2000. “Allegation of misrepresentation, suitability and elder abuse in regard to the purchase of municipal and corporate bonds( Heritage, American Banknote,Service Merchandise,Boston Chicken, Pioneer Finance, Globalstar Telecomunications (sp) and Brazos Sportswear).” The client sought $107,000 in damages and the case was settled for $4,000.

September 2000. “Purchase of Heritage Health Care municipal bonds between February of 1997 and January 1999,that defaulted. Client alleges that these investments were unsuitable .” The customer is seeking $40,000 in damages and the case is currently pending.

August 2000. “Client alleges misrepresentation in regard to the purchase of heritage bonds/municipal bonds which have defaulted.” The customer was awarded $168,400 in damages.

August 2000. “Allegations of beach (sp) of fiduciary duty, churning, misrepresentation,suitability and ommission (sp) of facts regarding the purchases of corporate bonds(American Banknote and Boston Chicken) which have defaulted and gone into Chapter 11 bankruptcy. Trades took place between March of 1997 and June of 1999.” The customer sought $312,000 in damages. “The United States Bankruptcy Court, Southern District of California, ordered on 8/7/2004 that Mr. Augusta, be granted a discharge from debts against him. Claims made by named claimants were included in the discharge order.”

August 2000. “Allegations of negligence,suitability, misrespresentation,breech (sp) of fiduciary duty regarding the purchase of municipal bonds (heritage health care) which have defaulted.” The customer sought $230,771.70 in damages. “The United States Bankruptcy Court, Southern District of California, ordered on 8/7/2004 that Mr. Augusta, be granted a discharge from debts against him. Claims made by named claimants were included in the discharge order.”

July 2000. “Client alleged that broker misled them regarding the risk, and the affiliation of the heritage facilities. The client also alleges breach of fiduciary duty, suitability regarding the solicitation of heritage bonds.” The client sought $377,000 in damages and the case was settled for $41,250.

July 2000. “The client alleges misrepresentation by broker regarding the purchase of heritage issue muncipal (sp) bonds which had defaulted and failure to supervise and poor due diligence on the part of miller & schroeder financial.” The customer sought $45,000 in damages. “The United States Bankruptcy Court, Southern District of California, ordered on 8/7/2004 that Mr. Augusta, be granted a discharge from debts against him. Claims made by named claimants were included in the discharge order.”

June 2000. “Client purchased high yeild (sp) municipal and corporate bonds from the broker that the customer claimed were unsuitable for an elderly individual, based on age, tax bracket, risk tolerance and investment objectives. Municipal bonds were purchased on the issue and subsequently defaulted.” The client sought $230,000 in damages and damages in the amount of $833,125 were granted.

Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, Wedbush Securities may be liable for investment or other losses suffered by Augusta’s customers.

Erez Law represents investors in the United States for claims against former Wedbush Securities financial advisor Mark Augusta regarding allegations of elder abuse. If you were a client of Wedbush Securities or another firm, and have experienced investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies on a contingency fee basis.