According to FINRA, Wedbush Securities Inc. (CRD #877), based in Los Angeles, California, was censured, fined $50,000, and ordered to pay $77,736.33 plus interest in restitution to customers. The firm consented to these sanctions without admitting or denying the findings. FINRA found that the firm failed to reasonably supervise recommendations to purchase variable rate structured products (VRSPs) made to its customers. VRSPs are complex financial instruments that carry substantial risks, including the potential to earn little or zero interest for years and subject investors to a risk of loss of principal. Despite these risks, the firm's representatives recommended that customers with either low or moderate risk tolerances purchase VRSPs. Such recommendations were found to be unsuitable for these customers given their investment profiles. The firm did not obtain disclosure forms from these customers and did not otherwise take steps reasonably designed to supervise whether the VRSP recommendations were consistent with their investment profiles. Collectively, these customers suffered realized losses of $34,576.33 after accounting for income earned while holding the VRSPs. FINRA also found that the firm's representatives unsuitably recommended that other customers invest in VRSPs at levels that resulted in unsuitable concentration. Each of these customers held VRSP positions equal to at least 25 percent of his or her liquid net worth. The firm had no exception report or other supervisory process concerning concentration in structured products and did not conduct reasonable supervisory reviews to evaluate whether the VRSP recommendations and concentration levels were suitable. These customers collectively paid $43,160.00 in sales charges for VRSP purchases but did not suffer realized losses. Wedbush Securities has since established revised written supervisory procedures and additional supervisory controls concerning structured products. For investors, this case is a reminder that complex products like VRSPs are not appropriate for everyone. Conservative investors with low or moderate risk tolerances should be cautious about structured products. Additionally, having a disproportionate share of your portfolio concentrated in any single product type can create undue risk, regardless of the product's characteristics.