The firm is investigating Mark Heiden, a Wedbush Securities broker. Heiden is accused of using sales practices that were related to the overconcentration of energy related stocks investments in customer accounts. These investments included
Energy XXI Bermuda Ltd.(EXXI):
Energy XXI was an independent oil and natural gas development and production company whose growth strategy emphasized acquisitions and organic drilling programs. The company’s properties are located in the U.S. Gulf of Mexico waters and the Gulf Coast onshore. Unfortunately, the security lost over 95% of its value in an approximate six month period and is now valued at less than 10 cents a share.
Clearbridge American Energy MLP (CBA):
This is a natural gas master limited partnership. The Fund concentrated its investments in energy related MLPs which subjected it to the risks of MLPs and the energy sector, including the risks of declines in energy and commodity prices, decreases in energy demand and adverse weather conditions. it invested in securities like Enterprise Product Partners, Enbridge Energy Partners, Targa Resources Corp. and Energy Transfer Partners.
Goldman Sach MLP Energy:
This investment concentrated its holdings in a basket of energy related master limited partnerships.
Arch Coal:
(ARCH) is a natural resource company. The company produces metallurgical and thermal coal, used to manufacture steel and generate electricity.
Seadrill:
Seadrill is a offshore drilling contractor headquartered in London.
Omeros Corp.
Carbylan Therapeutics
Morgan Stanley MT Note
Mark Heiden is being investigated as to whether he disclosed all material risks of said investments to clients, and whether he implemented an appropriate risk management strategy while recommending the investments. These investments, especially those in oil and gas and energy, can be extremely risky and unsuitable investments for many investors. A broker must take into account a client’s age, net worth, investment savvy and investment objectives before recommending or selling a security. If he does not, his brokerage firm may be liable for losses for lack of supervision.
Mark Heiden was also accused of executing unsuitable trades, making unauthorized transactions, falsifying documents and misrepresenting and omitting material facts related to an investment. He was also accused of failing to execute a limited sell order. All of these are against securities rules and regulations.
Mark Heiden was registered with Crowell, Weedon & Co. in Los Angeles, California from June 1997 until September 2000, Sutro & Co. in San Francisco, California from September 2000 until March 2002, RBC Dain Rauscher in Newport Beach, California from March 2002 until April 2007, and Morgan Stanley in Newport Beach from April 2007 until August 2013. He is currently registered with Wedbush Securities in Newport Beach and has been since August 2013.