William Mark Heiden of Newport Beach California a stockbroker formerly registered with Wedbush Securities Inc. has been fined $5,000.00 and suspended from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity according to an Office of Hearing Officers Order Accepting Offer of Settlement containing findings that Heiden executed unauthorized trades in accounts owned by elderly customers of Wedbush Securities Inc. Department of Enforcement v. William Mark Heiden Disciplinary Proceeding No. 2017053182001 (July 5, 2019).
According to the Order, in 2015, trades had been placed in a trust account established for the benefit of eighty seven year old customer, SK, who invested through Heiden for two decades. The Order stated that the account which SK maintained at Wedbush Securities had not been established for discretionary trading purposes. Accordingly, Heiden was not permitted to effect trades in the trust account on a discretionary basis. Supposedly, after SK met with Heiden for investment advice, Heiden placed unauthorized trades of Verizon Communications Inc., Northwest Natural Gas Company, and Clearbridge American Energy MLP Fund in the customer’s investment account.
Additionally, the Order revealed that Heiden serviced the accounts of a seventy-nine year old customer, NJ, who established an account with Heiden at Wedbush Securities Inc. Evidently, Heiden executed purchases in NJ’s individual retirement account without procuring the customer’s authorization, buying Western Asset Premier Bond, Easton Vance Tax Managed Global Diversified Equity Income Fund, Comcast Corp. Senior Notes and BP Prudhoe Bay Royalty Trust, while selling a slew of other securities from the customer’s account including investments in Putnam Diversified Income Fund and Oppenheimer Rochester California Municipal Fund. Trades had been effected in NJ’s accounts on additional days without Heiden having procured the customer’s authorization, causing the customer to suffer more than $10,000.00 in losses. FINRA Office of Hearing Officers found that Heiden’s unauthorized trading in NJ and SK’s accounts was violative of FINRA Rule 2010.
Moreover, the Order revealed that between August of 2013 and October of 2016, Heiden was obligated to comply with the policies of the firm necessitating contact with customers, and the procurement of authorizations from customers, prior to stockbrokers’ transactions being executed in customers’ accounts. The AWC stated that discretionary trading was only permitted with written authorization from a customer. Evidently, Heiden failed to procure approval from DP or KP, who relocated their investment accounts to Wedbush under the oversight of Heiden in 2013. Heiden apparently placed more than one hundred trades in the accounts belonging to DP and KP despite failing to procure any approval from the customers for his exercise of discretion. Additionally, the Order stated that there was no authorization provided by the firm warranting Heiden’s exercise of discretion. FINRA Office of Hearing Officers found Heiden’s conduct violative of FINRA Rule 2010 and National Association of Securities Dealers (NASD) Rule 2510(b).
FINRA Public Disclosure reveals that Heiden has been identified in fifteen customer initiated investment related disputes that concern accusations of his misconduct during the period that he was associated with securities broker dealers including Wedbush Securities Inc. Specifically, a customer initiated investment related arbitration claim regarding Heiden’s activities was resolved for $630,000.00 in damages founded on allegations that (1) Heiden engaged in conduct violative of state and federal securities laws (2) Heiden violated his contractual obligations to the customer (3) Heiden made unfounded statements and omissions to the customer concerning the equities held in the customer’s account (4) Heiden breached his fiduciary duties to the customer and (5) Heiden defrauded the customer. FINRA Arbitration No. 16-02500 (Aug. 30, 2017).
Another customer initiated investment related arbitration claim involving Heiden’s conduct was settled for $365,951.00 in damages based upon accusations that between September of 2013 and April of 2017, industry rules had been violated in connection with the structured notes and stocks sold to the customer; the customer was subject to elder abuse; and fiduciary obligations to the customer were breached. FINRA Arbitration No. 17-01473 (Apr. 13, 2018). Thereafter, on July 18, 2018, a customer filed an investment related complaint involving Heiden’s conduct where the customer sought $581,454.00 in damages supported by allegations that the customer was a victim of elder abuse; bad investment recommendations were made to the customer concerning master limited partnership interests and stock products; and the customer’s account was churned.
Subsequently, a customer initiated investment related arbitration claim concerning Heiden’s activities was resolved for $150,000.00 in damages founded on accusations that unauthorized trades were effected in the customer’s account; the customer was poorly advised regarding limited partnership interests; fiduciary duties were breached; omission had been made about investments; and the customer was defrauded. FINRA Arbitration No. 18-00572 (Sept. 21, 2018). Moreover, a customer filed an investment related arbitration claim in regards to Heiden’s activities in which the customer requested $4,200,000.00 in damages based upon allegations including the violation of NYSE and FINRA rules as well as federal and state securities laws; breach of contract; omissions; misrepresentation; breach of fiduciary duty; and fraud in regard to the investment transactions effected in the customer’s account while Heiden was employed by Wedbush Securities. FINRA Arbitration No. 18-03418 (Sept. 28, 2018).
Further, a customer filed an investment related arbitration claim involving Heiden’s conduct where the customer sought $1,195,000.00 in damages supported by accusations that fraudulent misrepresentations and unauthorized trades had been executed in the customer’s account, fiduciary obligations were violated, and the customer fell victim to elder abuse and fraud. FINRA Arbitration No. 19-00753 (Apr. 1, 2019).
Heiden’s registration with Wedbush Securities Inc. has been terminated as of June 26, 2018.
