An arbitration panel ruled that CASE Credit Union is entitled to $1 million from Prudential Equity Group LLC for alleged losses it suffered as a result of investing in collaterized mortgage obligations.
According to the Financial Industry Regulatory Authority award dispute resolution signed on May 14, the $180 million CASE CU alleged that its investment committee met with Mark Wickard, an agent for Prudential Equity, to discuss the Lansing, Mich.-based credit union's portfolio. Wickard said investing in CMOs and interest-only strips was "safe and suitable," according to CASE. The CU said that shortly after making the investments, they began to show a loss, never recovered and were sold at a loss through another broker.
Prudential Equity denied the allegations, saying it acted in good faith and any alleged damages sustained by CASE were the result of market forces and omissions of individuals, entities and conditions over which it had no control.
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