FINRA Panel Orders Charles Schwab to Pay Damages Over Structured Product Losses Sold by Vora Wealth Management

Posted on October 27th, 2025 at 11:46 AM
FINRA Panel Orders Charles Schwab to Pay Damages Over Structured Product Losses Sold by Vora Wealth Management

From the desk of Jim Eccleston at Eccleston Law

A three-person FINRA arbitration panel ordered Charles Schwab & Co. to pay $165,440 in compensatory damages to a former client of Vora Wealth Management, after losses tied to complex structured products.

According to InvestmentNews, the now-defunct Vora Wealth Management, was founded by Dharmesh Vora, who made large speculative investments in structured notes linked to four NASDAQ-listed stocks. Those investments ultimately caused millions in losses for clients.

This marks the second FINRA arbitration award against Schwab this year involving former clients of Vora Wealth. InvestmentNews reports that, in March, another FINRA panel ordered Schwab to pay $167,950 in compensatory damages former Vora clients. Both claims alleged negligence and breach of fiduciary duty.

According to the Securities and Exchange Commission (SEC), Dharmesh Vora—who was barred from the securities industry in 2023—sold structured notes between November 2020 and November 2021 without properly disclosing the transactions to clients. The SEC reported that Vora used $124 million of clients’ $139.5 million in assets to buy the notes, often with proceeds from annuity sales.

InvestmentNews reports that, the investments began to unravel in November 2021, when one of the underlying stocks fell below its 50 percent downside protection level, triggering termination of coupon payments. The stock never recovered, and clients ultimately suffered more than $89 million in realized principal losses by mid-2024.

To date, three investor claims have been filed against Schwab related to Vora Wealth’s actions, with additional cases expected.

 

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.

Tags: eccleston, eccleston law, finra, charles schwab

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