Case to Proceed

In a partial reversal, the dispute-resolution office of NASD Regulation Inc. directed an arbitration case against Wedbush Morgan Securities Inc. to proceed.

The case arose from a complaint by Eagle Opportunities Fund Ltd., a short-seller that claimed it was forced to buy the stock of Internet retailer Shopping.com in Corona del Mar at inflated prices.

On May 15, NASD administrators dropped the case against Wedbush and Irvine brokerage Waldron & Co., ruling that Eagle Opportunities didn’t have standing to force an arbitration. On May 29, however, the NASD reversed itself with respect to Wedbush, after it realized that an executive with the Los Angeles brokerage firm had signed a voluntary agreement for arbitration.

But the firm isn’t likely to submit to arbitration without a fight. “Bottom line: Wedbush is not going to arbitration with that client,” said a Wedbush source who asked not to be named.