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DBSI Claims Put DeWaay on the Ropes

DeWaay Financial Network LLC, one of several broker-dealers being sued by the trustee for DBSI Inc.’s private-actions trust, may pay the ultimate price for selling the real estate firm’s deals.

Last month, claiming that bankruptcy looms, DeWaay asked a federal judge in Delaware for a temporary injunction to halt eight arbitration claims that investors have filed with the Financial Industry Regulatory Authority Inc. stemming from their losses in DBSI securities. 

The DeWaay memorandum raising the specter of bankruptcy was one of several filings in a case that began in July when the DBSI trustee, James Zazzali, sued DeWaay and five other broker-dealers that sold DBSI deals.