LANSING, Mich.-The Financial Industry Regulatory Authority has awarded CASE CU more than $1 million in an arbitration ruling alleging misrepresentation and omission of investments in collateralized mortgage obligations and CMO Interest Only strips it had acquired from Prudential Equity Group.
FINRA, which was formerly known as the National Association of Securities Dealers, is the disciplinary panel for securities firms.
The allegations in the case focused on Prudential and its "Credit Union Strategy Group," then headed by Mark Wickard, a registered representative of both Prudential, then of Wachovia Securities, which bought the Prudential unit.
These complicated products, which are very sensitive to interest rate changes, were represented as safe and suitable, when in fact they were not, causing the CU to suffer unexpected losses the CU argued. A panel of three arbitrators found for CASE CU and awarded it more than $1 million in damages.
