Edward Ian Herbst of New York New York a stockbroker currently registered with Wellington Shields Co. LLC is referenced in a customer initiated investment related written complaint on February 28, 2018 where the customer sought $88,364.96 in damages based upon allegations that the customer sustained unjustified losses on municipal-debt investments.
Financial Industry Regulatory Authority (FINRA) Public Disclosure reveals that Herbst is referenced in four more customer initiated investment related disputes pertaining to accusations of Herbst’s misconduct during the period that he was associated with Cowen & Co. and SG Cowen Securities Corporation.
For example, Herbst was named in a customer initiated investment related arbitration claim in which customers were collectively awarded $3,843,141.00, comprised of compensatory and punitive damages, based upon Herbst being found liable on the customers’ claims of effecting unauthorized derivative purchases in the customers’ accounts, effecting transactions in their accounts that were not suitable for them, churning their investment portfolios, and defrauding them. National Association of Securities Dealers (NASD) Arbitration No. 95-05923 (Feb. 9, 1999). Apparently, the unauthorized securities purchases consisted of two inverse floaters and Credit Suisse bonds, where undisclosed commissions of more than $1,000,000.00 had been charged on the securities. Herbst reportedly attempted to conceal the purchases, commissions, and information about reductions in values of securities held in the customers’ accounts.
Thereafter, a customer initiated investment related arbitration claim concerning Herbst’s activities was resolved for $500,000.00 in damages supported by allegations that fixed income derivatives trades were executed in the customer’s account on an excessive and unsuitable basis, and unwarranted commissions were charged to the customer for those investment transactions. NASD Arbitration No. 99-2061 (Aug. 9, 2000). Another customer initiated investment related arbitration claim regarding Herbst’s conduct was settled for $850,000.00 in damages founded on accusations of suitability and excessive margin use pertaining to fixed income derivatives investments. NASD Arbitration No. 99-2455 (Aug. 9, 2000).
Moreover, a customer initiated investment related arbitration claim involving Herbst’s activities was resolved for $330,000.00 in damages based upon allegations that transactions were effected in the customer’s account that were not suitable for the customer; trades were executed in the customer’s account without authorization; and omissions and misrepresentations of information had been made to the customer concerning equities held in the customer’s account. NASD Arbitration No. 99-04777 (Aug. 28, 2000).
Additionally, FINRA Public Disclosure confirms that Herbst consented to the Massachusetts Securities Division’s requirements that he be placed on heightened supervision as a condition of registering as a salesperson in the state, and was precluded from undertaking any managerial, principal or supervisory duties while employed with Shields & Company, based upon findings of Herbst being subject of customer disputes alleging suitability, excessive trading, unauthorized trading, and unauthorized margin use. Case No. R-02-44 (May 14, 2002).
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