FINRA has barred William H. Sandeman, a former Wedbush Securities broker based in Seattle, after finding that his recommendations cost 81 retail customers more than $3.5 million. The regulator said Sandeman pushed volatility-linked and non-traditional exchange-traded products as long-term holdings without understanding their risks or weighing his customers’ investment profiles.
What happened in the Sandeman case
FINRA finalized the settlement on October 5, 2026, under a Letter of Acceptance, Waiver and Consent, AWC No. 2022073920901. The 48-year industry veteran agreed to a bar from associating with any FINRA member firm in all capacities. He accepted the sanction without admitting or denying the findings.
According to the settlement, Sandeman recommended that 81 retail customers buy and hold complex exchange-traded products between December 2020 and January 2025. Those products included volatility-linked ETPs and non-traditional ETPs designed for short-term trading sessions. FINRA found he had no reasonable basis for the recommendations.
The result was more than $3.5 million in realized losses across the affected accounts. Fifty-nine of the 81 customers were seniors, a detail that sharpens the supervisory questions around the case.
Key facts from the FINRA settlement
| Item | Detail |
|---|---|
| Broker | William H. Sandeman, Seattle, WA (CRD# 831384) |
| Firm | Wedbush Securities Inc. (CRD# 877), Pasadena, CA |
| Sanction | Bar from associating with any FINRA member firm, all capacities |
| AWC number | 2022073920901, finalized October 5, 2026 |
| Conduct period | December 2020 through January 2025 |
| Customers affected | 81 retail customers, 59 of them seniors |
| Losses cited | More than $3.5 million in realized losses |
| Rules cited | SEC Regulation Best Interest and FINRA Rule 2010 |
| Firm sanctions | None imposed on Wedbush, which has roughly 400 advisors |
Why these products hurt long-term holders
Volatility-linked ETPs track the CBOE Volatility Index through VIX futures, which must be sold and replaced with costlier contracts as they roll. That structure erodes value the longer the product sits in an account. Non-traditional ETPs chase amplified or inverse returns over a single session, and daily compounding drags multi-year results far from the benchmark.
The settlement noted that prospectus disclosures warned about both risks. FINRA found the disclosures did not carry the recommendation, because Sandeman lacked any reasonable basis to believe the products fit his customers in the first place.
Sandeman’s record and complaint history
Sandeman registered with Wedbush in December 2000 and remained there until January 2025, when the firm terminated his registration over what it described as a lack of confidence related to performance. Earlier in his career he worked at PaineWebber and Oppenheimer & Co.
His BrokerCheck report shows a customer dispute received in October 2024 alleging losses in ETF and ETN holdings, including funds built to amplify single-day index moves. That claim sought $350,000 and settled for $30,000 in November 2024. A second complaint alleging sector overconcentration was dismissed without action.
FINRA’s investigation grew out of an examination of Wedbush. The firm itself was not named or sanctioned in the settlement.
What affected investors should do now
Customers who held volatility-linked or non-traditional ETPs on Sandeman’s recommendation can request their complete account history from Wedbush. Purchase dates, holding periods, and realized loss figures will anchor any recovery claim.
FINRA arbitration is the standard forum for claims against a broker-dealer, and eligibility rules generally require filing within six years of the events at issue. Investors who lost money on these products can have a securities attorney review the account at no cost to determine whether the recommendations support a claim.
Haselkorn & Thibaut fights for investor recovery
Haselkorn & Thibaut is a securities law firm founded by former Wall Street defense attorneys who shifted their practice to represent investors. The firm has recovered over $520 million for clients in securities matters and maintains a 98 percent success rate in resolved nontraded REIT cases. Attorneys are AV Preeminent rated through Martindale-Hubbell, designated as Super Lawyers, and hold a 5.0-star client review average. The firm operates on a contingency basis — no recovery, no fee.
Contact Haselkorn & Thibaut today
Time matters in investment recovery cases. The earlier you act, the stronger your position. The firm offers a free case evaluation to assess your losses, review your account history, and explain your options under arbitration or settlement.
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