The White Law Group is investigating potential securities claims involving Wedbush Securities (CRD #877, Los Angeles, CA)
Wedbush Securities, headquartered in Los Angeles, CA, is a national financial advisory firm. According to its FINRA Broker Report, the firm reportedly has 174 disclosure events on its broker record including 111 regulatory events and 60 arbitrations.
Wedbush Securities has Numerous Regulatory Events
February 2018 – FINRA fined Wedbush Securities $1.5 million for net capital deficiencies and for failing to accurately calculate its customer reserve requirement.
March 2018 – The SEC reportedly called Wedbush Securities Inc. a recidivist or repeat offender after it charged the firm with failure to supervise just one month later, according to a press release.
The broker-dealer allegedly ignored numerous red flags, according to the SEC’s March 2018 order, indicating that one of its registered representatives was involved in an alleged long-running pump-and-dump scheme targeting retail investors.
Wedbush purportedly failed reasonably to supervise Timary Delorme, who purportedly engaged in manipulative trading activity of penny stocks over multiple years.
The SEC indicated that Wedbush was aware of certain aspects of her alleged activity in 2012 and 2013 but its supervisory policies and implementation systems failed reasonably to guide staff on how to investigate the activity, according to the SEC’s order.
September 2019 – The Securities and Exchange Commission reportedly settled charges against 17 investment advisers, including Wedbush Securities, for disclosure failures regarding their mutual fund share class selection practices.
The firms include 16 advisers that self-reported as part of the SEC’s Share Class Selection Disclosure Initiative and were ordered to pay over $135 million in disgorgement and prejudgment interest to investors. Now, the Commission reportedly issued orders against 16 additional advisers that self-reported as part of the initiative, bringing the total amount ordered to be returned to investors to over $135 million. These firms were not required to pay a civil penalty.
Broker Misconduct and Customer Complaints
There have been several cases of registered representatives employed by Wedbush Securities who were allegedly involved in broker misconduct and fraudulent activities.
January 2019 – The Financial Industry Regulatory Authority (FINRA) reportedly suspended former Wedbush advisor Mark Heiden from associating with any FINRA member for 6 months and fined him $5,000 and ordered him to pay restitution of more than $12,000.
FINRA alleged that Heiden engaged in unauthorized trading in the accounts of two elderly customers, purportedly without first obtaining these elderly customers’ authorizations, as required.
According to his FINRA broker report, Heiden was registered with Wedbush Securities in Newport Beach, CA from August 2013 until June 2018. He allegedly has 18 customer complaints filed against him, according to his broker report. Allegations include elder abuse, breach of fiduciary duty, churning, fraud by misrepresentation, and unauthorized trades, among others.
Wedbush pays $1.4 million in damages to California couple
June 2017 – A FINRA Panel ordered Wedbush Securities to pay $1.4 million in damages and commission disgorgement to a couple who invested in long-term municipal bonds and structured certificates of deposit.
FINRA also ordered Wedbush Securities to pay the CA couple’s former broker almost $60,000 of lawyers’ fees and costs, upholding his claim for indemnification despite finding him and Wedbush liable for unauthorized trading and violation of California’s elder abuse statute.
All broker-dealers have a responsibility to adequately supervise its employees. They must ensure the necessary procedures and systems to detect misconduct. Brokerage firms that fail to monitor the business activities of their employees may be liable for investment losses due to negligent supervision for the misconduct of their employees.
When brokers violate securities laws, such as making unsuitable investments, the brokerage firm they are working with may be liable for investment losses through FINRA Arbitration.
Free Consultation with a Securities Attorney
The foregoing information, which is all publicly available, is being provided by The White Law Group. The White Law Group is a national securities arbitration, securities fraud, and investor protection law firm with offices in Chicago, Illinois.
If you have concerns regarding investments you purchased through Wedbush Securitiesand would like to speak with a securities attorney, please call The White Law Group at 888-637-5510.
For more information on The White Law Group, visit www.whitesecuritieslaw.com.