On July 13, 2017, a FINRA arbitration panel issued an award finding that Wedbush Securities and its former broker, Mark F. Augusta, “engaged in improper conduct” regarding two elderly customers, Agatha and John Dancy, 16-00847.
The hearing took place in Los Angeles, CA. Augusta worked out of Wedbush’s Solana Beach, CA office.
The arbitration claim, filed in March 2016, alleged breach of fiduciary duty, fraud and failure to supervise, among other claims. The claim named both Wedbush and Augusta as respondents. The claim centered on the purchases of long-term municipal bonds and structured certificates of deposit.
In his answer, Augusta, who now works at Hilltop Securities in Del Mar, CA, filed a cross claim for indemnification against Wedbush.
During the hearing, the panel granted the claimants’ attorney’s motion to add a count of unauthorized trading.
The panel awarded the 87 and 91 year old claimants $250,000 in compensatory damages, $110,000 in disgorgement of commissions, interest of approximately $50,000, $1,080,000 in punitive damages, $277,691 in attorneys’ fees, and $28,864 in costs. This award of damages was against Wedbush solely.
In a somewhat unusual finding, the panel awarded Augusta $110,000 on his cross claim versus Wedbush. However, the panel then subtracted from that amount the commissions earned by Augusta servicing the claimants’ account. The net award to Augusta was $59,828.
The panel stated in the award that the punitive damage finding was based on the California Elder Abuse and Adult Civil Protective Act. The panel further stated that Wedbush and Augusta “subjected the Claimants to elder abuse and that they permitted unauthorized trading in the Claimants’ account.”
Given this specific finding by the panel, it is somewhat shocking that any type of award was made in Augusta’s favor.
Augusta has been in the securities industry for 31 years. He worked at Wedbush from January 2011 until May 2015.Prior to Wedbush, he worked at Stone and Youngberg from July 2006 until January 2011 in their San Diego office.
Augusta’s BrokerCheck report lists 15 customer dispute disclosures since 2000.
Elder abuse is a growing concern in the securities industry. FINRA and state regulators have specific programs to deter, detect and prevent the abuse of elderly investors – but it still happens with alarming frequency.
Our practice is limited to the representation of investors. We accept representation on a contingent fee basis, meaning there is no cost to you unless we make a recovery for you. There is never any charge for a consultation or an evaluation of your claim. For more information, contact us at (877) SEC-ATTY.
For more information concerning common claims against stockbrokers and investment professionals, please visit us at securitiesarbitrations.com
Nicholas J. Guiliano has over twenty years experience representing investors before the Financial Industry Regulatory Authority, the New York Stock Exchange and before the National Association of Securities Dealers, Office of Dispute Resolution. Over the last twenty years, he has represented more than a thousand investors from all across the United States and from several foreign countries, in claims against stockbroker and broker-dealers for fraud, breach of fiduciary duty, churning or excessive trading, the sale of unsuitable investments, the sale of defective investments, the sale of unregistered securities, and the failure to supervise. He is frequently quoted in the national media on securities and investment related issues, most recently on National Public Radio. He offers his services on purely a contingent fee basis, and is also a member of Public Investors Arbitration Bar Association.
