Below is a reposted article from Desmoinseregister.com. It reads…
The long legal battle between Donald DeWaay and disgruntled investors looks to be headed for the Iowa Supreme Court.
An Iowa Court of Appeals ruling handed down Wednesday rejects a $3 million class-action lawsuit request that would have settled claims against DeWaay’s now-defunct Clive financial services firm, DeWaay Financial Network.
The appeals court ruling overturns a decision by Decatur County District Judge John Lloyd, who had approved the class-action lawsuit.
Steve Wandro, an attorney representing DeWaay, said it’s likely the case will go to the state Supreme Court on appeal.
“We’ve got to go for the tiebreaker now,” Wandro told the Register on Wednesday.
Complaints against DeWaay and the legal battle go back to before 2012.
Lawsuits filed against DeWaay Financial claim company officials allowed investors to place their money in unsuitable investments and misrepresented risks.
The suits circle around DeWaay Financial’s sale of private placement investments from Delaware-based DBSI Inc., which packaged real estate deals and oil-and-gas-development deals for Provident Royalties LLC and subsidiaries.
The district court-approved suit would not have allowed individual investors to opt out, meaning they would not have been permitted to file their own suits.
Attorneys for DeWaay contend the class-action was the only way investors with complaints could receive any sort of payment. DeWaay’s finances, they said, would not have been able to handle the multitude of individual complaints.
“This is a good deal for these investors,” Wandro said. “They will not get that money if they go out and try to sue (individually). There simply isn’t enough money to go around.”
Some DeWaay investors intervened in the case, appealing the ruling. Gail Bolivar, an attorney representing the intervenors, said the non-opt-out class-action would be an unusual move for Iowa cases.
Bolivar also said the class-action would have resulted in pennies on the dollar results for investors.
“We didn’t think that was very economic for anybody,” he said.
Both Bolivar and Wandro said not to expect a quick resolution.
DeWaay is registered as an investment adviser with DeWaay Capital Management with the Financial Industry Regulatory Authority.
DeWaay Financial Network relinquished its broker-dealer license with FINRA in November 2012.