U.S financial services firm pay penalty to settle failure
The Securities and Exchange Commission (SEC) announced that Wedbush Securities Inc. will pay a $250,000 penalty and has agreed to be censured to settle its failure to supervise charge in a pending administrative proceeding.
According to the SEC’s March 2018 order instituting proceedings, Wedbush ignored numerous red flags indicating that one of its registered representatives was involved in a long-running pump-and-dump scheme targeting retail investors. Wedbush conducted two flawed and insufficient investigations into the registered representative’s conduct, and failed to take appropriate action.
The settlement acknowledges remedial measures taken by Wedbush since March 2018, including changes made to senior leadership, revised policies and procedures, improved electronic surveillance, and the allocation of additional resources to internal and audit controls groups.
“Wedbush abandoned important responsibilities to its customers by looking the other way in the face of mounting evidence of manipulative conduct,” said Marc P. Berger, Director of the SEC’s New York Regional Office. “After we filed our claim, Wedbush made significant changes aimed at reforming its practices to detect and report misconduct within its ranks.”
The SEC’s investigation was conducted by John O. Enright, Lindsay S. Moilanen, and Sheldon L. Pollock. The litigation was led by Mr. Enright, Ms. Moilanen, Howard Fischer and Janna I. Berke. The case was supervised by Lara Shalov Mehraban of the New York Regional Office.