An arbitrator has agreed with an aggrieved investor who says several Nebraska City brokers improperly sold risky investments in several interrelated Florida companies.
The recent arbitration order is the first ruling in a case that has spawned at least three lawsuits in federal and state courts accusing the brokers and officials at the Florida companies of defrauding investors of more than $20 million. The lawsuits are still in the preliminary stages.
Most of the upset investors were nearing retirement age or were already retired when they got involved with broker Rebecca Engle, so they wanted conservative, stable investments with little risk. They say Engle instead invested their money in high-risk enterprises and never fully explained the risks.
The arbitrator ordered Engle, the broker at the center of the lawsuits, and her employer at the time, Wachovia Securities LLC, to pay $80,000 in damages and pay attorney fees, said Lincoln lawyer J.L. Spray, who represents most of the investors. Spray said Thursday his client who had won in arbitration had not given him permission to discuss the details of that case.
Several of the more than 130 investors pursuing complaints against the brokers and the companies that employed them are barred from suing, so they must seek damages in arbitration through the Financial Industry Regulatory Authority.
Engle and another broker, former Nebraska football player Brian Schuster, sold securities in American Capital Corp. and Royal Palm. Those two Florida companies have both been bought by PrimEdge Inc., and Schuster became the president and chief executive of PrimEdge.
Engle's lawyer, Martin Berliner, did not immediately respond to a message left Thursday afternoon, but he previously said the allegations against her are misleading and in many cases inaccurate.
Berliner has said Engle believed in the Florida companies she recommended to investors and invested between $500,000 and $600,000 of her own money in them.
Engle and several other brokers all worked with each other in Nebraska City at times between 2000 and 2007. The brokers were affiliated with at least three different companies _ Capital Growth Financial LLC, Wachovia Securities LLC and VSR Financial Services Inc. _ during those years. Those three companies are listed in the arbitration claim.
The other brokers listed in the arbitration order are Schuster, Peter Lahti and Paula Turner, who all worked with Engle at some point.
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