The head of a small broker-dealer is the target of a $3 million Finra arbitration complaint over the sale of variable annuities and real estate securities.
Jackie Wadsworth is the owner and CEO of IMS Securities Inc., and is the subject of the complaint, according to her BrokerCheck report with the Financial Industry Regulatory Authority Inc.
According to the BrokerCheck
report, Ms. Wadsworth faces allegations of negligence, over-concentration, breach of fiduciary duty, misrepresentations and failure to supervise. The product types in the complaint, which was filed last month, are variable annuities and real estate securities, according to the BrokerCheck report.
Because Finra arbitrations are private, further details about the complaint's allegations were not available.
“IMS Securities has no comment at this time,” said an IMS employee who declined to give his name to
InvestmentNews.
IMS is a small Houston-based firm that posted $11.5 million in revenue last year, according to a filing with the Securities and Exchange Commission. Its balance sheet is tilted heavily in the direction of high-commission products like variable annuities and nontraded REITs; close to 86% of its revenue in 2015 came from commissions, according to the SEC filing.
InvestmentNews in February reported that IMS Securities
was one of the four leading sellers of real estate investment trusts sponsored by United Development Funding, according to attorneys and industry consultants.
The bottom fell out of those REITs last December, after an investor website — led by noted hedge fund investor Kyle Bass —
posted a report that alleged that UDF IV, which was a nontraded REIT that later listed as a publicly traded REIT, operated for years like a Ponzi scheme. Management at UDF has denied those allegations.
UDF REITs are not mentioned in Ms. Wadsworth's BrokerCheck report.
A spokesman for UDF, Jeff Eller, declined to comment.
