March 28, 2018 Comments (0) Blog, Current Investigations, Securities Fraud

SEC Charges Wedbush with Failure to Supervise Advisor Timary Delorme

Timary Delorme
(Last Updated On: March 28, 2018)

Los Angeles Advisor Timary Delorme accused of Pump- and- Dump Scheme

According to a press announcement today, the Securities and Exchange Commission announced charges against Wedbush Securities Inc. for failing to supervise employee Timary Delorme.

The SEC alleges that Wedbush ignored numerous red flags indicating that Delorme was involved in a long-running pump-and-dump scheme targeting retail investors.

Delorme reportedly agreed to settle fraud charges stemming from the scheme.  This is the second SEC action against Wedbush this year and the third since 2014.

The SEC’s investigation found that while Delorme was registered with Wedbush, she invested her customers in microcap stocks that were the subject of a “pump-and-dump” scheme orchestrated by Izak Zirk Engelbrecht, who was previously charged by the Commission and criminal authorities in separate actions.

According to the SEC’s order, Wedbush ignored multiple red flags of Delorme’s fraudulent scheme.

Wedbush reportedly conducted two flawed and insufficient investigations into Delorme’s conduct but failed to take appropriate action, despite a customer email outlining Delorme’s involvement in the scheme and multiple FINRA arbitrations and inquiries regarding her penny stock trading activity.

Failure to Supervise

The SEC alleges that Wedbush failed to reasonably to supervise Delorme with a view to preventing and detecting her violations.  The matter will be scheduled for a hearing before an administrative law judge, who will hear the case and prepare an initial decision.

A separate order finds that Delorme violated the antifraud provisions of the federal securities laws.  Without admitting or denying the findings, Delorme agreed to entry of the order, which requires her to pay a $50,000 penalty, imposes industry and penny stock bars, and orders her to cease and desist from future violations.

The White Law Group is investigating potential claims involving the liability that Wedbush Securities may have for failing to properly supervise Timary Delorme.

Brokerage firms have a legal responsibility to adequately supervise the business activities of their employees. If a broker engages in a scheme that misleads clients the brokerage firm that employs them may be liable for negligent supervision.

When brokers make unsuitable investment recommendations and squander client funds, the brokerage firm that employs them may be liable for failure to supervise and responsible for investment losses.

If you were a client of Timary Delorme and Wedbush Securities and suffered losses, The White Law Group may be able to help you by filing a FINRA arbitration claim. For a free consultation with a securities attorney call 888-637-5510.

The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Vero Beach, Florida.

For more information on The White Law Group, visit www.whitesecuritieslaw.com.