Investor Lawyers Blog
Former broker Debbie Saleh and her former employer, Wedbush Inc., must pay $2.9 million to Southern California investor Rick Cooper. Saleh drained Cooper’s account between 2004 and 2009 through a process called “churning.” The churning generated a significant amount in commissions through the unauthorized purchasing and selling of annuities. According to the arbitration panel, Saleh’s broker misconduct included lying about the value of Cooper’s investments, sending false statements and forging his signature.
Cooper began investing with Saleh after his mother trusted her with her own finances. According to arbitration proceedings, Saleh had been invited into his mother’s home and she received gifts from Cooper at Christmas. Cooper, now living in a mobile home, expressed his thoughts of suicide when he lost everything and could not make payments on his condominium. The arbitration panel expressed its disgust by ordering Saleh to pay a $500,000 emotional distress payment and a $1 million elder abuse payment, a rarity for securities arbitration. In addition, Wedbush itself was ordered to pay $300,000, and its chairman another $200,000, for emotional distress. Together, Wedbush and Saleh will pay $390,000 for Cooper’s attorney fees and $471,000 in compensatory damages.
Wedbush failed to supervise and curb Saleh’s wrongdoing, making the firm partially responsible for her actions.
“They did absolutely nothing to stop this woman from continuing to take advantage of her customers,” Cooper’s attorney said.
According to FINRA, regulators have investigated Saleh four times, and a total of ten customers have filed complaints against her. Even after customer complaints, Wedbush failed to take action to curb her misconduct. This is the second arbitration loss the firm has faced in as many months.
“Saleh’s conduct was premeditated, egregious and unconscionable,” the arbitration panel said.
Saleh was permanently barred in 2009 from working in the securities industry.
If you believe you may be the victim of churning, contact an investment attorney immediately. The Law Office of Christopher J. Gray can be reached at (866) 966-9598 for a no-cost, confidential consultation.