DeWaay gets reprieve from Iowa court

DeWaay Financial Network LLC, one of dozens of broker-dealers ensnared in litigation over private placement investments gone sour, got some momentary relief from the Iowa District Court for Decatur County on Thursday. Judge John Lloyd ruled to keep temporary restraining orders in place while he considers the merits of a class action filed against the broker-dealer. The orders prevent more than a dozen arbitration claims filed against the company with the Financial Industry Regulatory Authority Inc. from proceeding. The Finra claims are seeking collective damages of more than $6 million — more than seven times the company's current net capital of $820,000, according to financial documents filed by the firm last month. Lawyers for arbitration claimants asked the court to revoke the restraining order and let their cases with Finra proceed. However, the plaintiff's attorneys who filed the class action against the firm argued that there is not enough money to go around and that the more equitable solution would be to roll all claims into a non-opt out class action. “This is a win for equity and fairness,” said Scott Adkins, a plaintiff's lawyer with Menzer & Hill PA who working on the case. “DeWaay has extremely limited resources and hundreds of clients who've lost a lot of money.” “The balance to be struck here is between the early birds, who would have the whole worm, and the late risers, who would have the worm diced into small pieces,” Judge Lloyd wrote in his decision. The court will now consider the merits of the class action. Executives at DeWaay Financial were not immediately available for comment.