A FINRA arbitration panel said Wednesday that Wedbush Securities must pay advisor Michael Paul Farah some $4.27 million in connection with the sale of collateralized mortgate obligations or CMOs.
Farah, who filed the claim in May 2005 and amended it in October 2012, said that Webush had “made misrepresentations and omitted material facts in connection with the ‘CMO’ investments that he recommended to his clients, causing Farah to lose clients and annual income.”
FINRA ordered Los Angeles-based Wedbush to pay Farah $1.33 million for lost income, $1.44 million for punitive damages and nearly $1.5 million for fees covering attorneys and court costs.
In its counterclaim, Wedbush asserted that Farah interfered with his contractual relations, intentionally misrepresented certain facts and failed to carry out his fiduciary duty.
“We wholeheartedly disagree with the ruling and are currently reviewing our options,” said Wesley Long, executive vice president and head of private client services for Wedbush, in a statement.