A group of San Luis Obispo County investors – clients of Jeffrey Forrest of WealthWise LLC in San Luis Obispo who had lost millions in the failed APEX Equity Options Fund – has been awarded more than $8.8 million in damages by the Financial Industry Regulatory Authority, an independent regulator of U.S. securities firms.
The FINRA arbitration panel found that Forrest, who had been an Associated Securities broker, was liable for selling what amounted to a risky hedge fund to clients, according to attorneys representing the 16 households involved in the case. The fund, worth more than $40 million, that collapsed in August 2007.
Forrest's representations to his clients about the “safety and liquidity of their investments in APEX, in light of what Forrest knew and understood from the written offering documents constitutes fraud or deceit within the meaning of California law,” said Phil Aidikoff, an attorney for Beverly Hills law firm Aidikoff, Uhl & Bakhtiari.
As well, the FINRA panel found that Associated Securities was also liable for Forrest’s conduct because of “its failure to diligently and properly supervise Forrest's activities,’’ said attorney Robert Uhl.
The award represents 100 percent of the money the firm's clients had invested in the APEX fund.