FINRA Files Complaint against William Heiden Alleging Unauthorized TransactionsFriday, February 8, 2019
The Financial Industry Regulatory Authority (FINRA) Department of Enforcement recently filed a complaint against former registered representative William Heiden for allegedly engaging in unauthorized trading in two elderly customers’ accounts.
According to his FINRA BrokerCheck report, Heiden has been associated with six FINRA member firms since becoming registered as a general securities representative in April 1997. Most recently, Heiden was associated with Morgan Stanley from June 2009 to August 2013 and Wedbush Securities Inc. from August 2013 to June 2018, both of which are located in Newport Beach, California.
FINRA alleges in the complaint that between August 2013 and October 2016, Heiden exercised discretion in the accounts of two elderly customers without written authorization from them and without obtaining permission from Wedbush Securities to exercise discretion in the accounts.
One customer met with Heiden to re-evaluate her financial situation after her husband’s death less than one month earlier. According to the complaint, the customer and family members instructed Heiden to make one investment in a structured note which he recommended. Instead, Heiden allegedly bought hundreds to thousands of shares in Clearbridge American Energy MLP Fund, Northwest Natural Gas Company, and Verizon Communications Inc. for a total of nearly $130,000. The complaint states that he later cancelled the requests after the customer’s daughter repeatedly instructed him to do so.
FINRA also alleges that Heiden exercised discretion without authorization in another customer’s account after only one introductory meeting. In February 2015, he executed hundreds to thousands of transactions totaling over $50,000 in the customer’s IRA account, including common stock shares of BP Prudhoe Bay Royalty Trust, Comcast Corp. Senior Notes, Eaton Vance Tax Managed Global Diversified Equity Income Fund, and Western Asset Premier bond. He also allegedly executed hundreds of thousands of dollars in transactions in the customer’s trust account without prior authorization.
Based on the foregoing, Heiden violated NASD Rule 2510(b) and FINRA Rule 2010 by exercising discretion without prior authorization from the customer and for failing to “observe standards of commercial honor and just and equitable principles of trade.”
FINRA Department of Enforcement is requesting relief to make findings of fact and conclusions of law that William Heiden committed the violations alleged in the Complaint and order that sanctions and fines be imposed under FINRA Rule 8310(a) and 8330.
Heiden had an extensive customer dispute history during his time at Wedbush Securities including allegations of unsuitable recommendations, breaches of fiduciary duties, unauthorized trades, fraud by misrepresentation and omission, among other things. Wedbush ultimately terminated Heiden’s registration due to “[e]xcessive number of customer complaints.”
If a broker was not properly supervised while registered at a brokerage firm, the firm can be held liable for the broker’s misconduct. Did William Heiden’s alleged misconduct cost you money? If so, you may be able to recover from him or his brokerage firm Wedbush Securities. Since 1998 our firm has been representing victims of investment fraud and broker misconduct. Call us (1-877-410-8172) today for a free, no obligation consultation.