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Wedbush Has 81 Regulatory Events and 57 Reported Arbitrations

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Wedbush was found by the Finra securities regulator to have failed to accurately transmitted reports of trading, and was fined $67,500.  The securities regulator found that the firm failed to prepare accurate books and records, and failed to accurately mark proprietary sell orders as long and failed to mark sale orders as short, and accordingly these transactions were not accurately reported.  Wedbush’s written supervisory procedures filed to adequately provide for this information.  (See Finra 2011026107603).

Wedbush was found by the Securities and Exchange Commission (SEC) to have recommended and sold junk bonds and other lower rated bonds to customers in amounts below the minimum denominations of the securities.  Minimum denominations are generally intended to limit sale of municipal securities to retail customers for whom such bonds may not be suitable.  Such sales can indicate the recommendation of unsuitable securities to customers and these violations are found to be willful violations.  Wedbush was censured, and fined $67,200 for these violations.  The SEC further ordered Wedbush to cease and desist from such future violations.  (See US SEC 3-16240).    Since the time of the SEC’s actions, the values of the involved Puerto Rico bonds have plummeted, causing significant losses to investors.  Puerto Rico is in a serious economic situation causing great harm to the economy there, and to all investors of the Puerto Rico bonds.

Wedbush was fined $2,447,000 and censured by the SEC for acting as a gateway to U.S. markets for dozens of foreign trading firms, and thousands of their traders.  By doing so, Wedbush willfully violated the Securities Exchange Act because it did not maintain exclusive control over risk management controls in sponsored access trading platforms, did not have a system of supervisory procedures that was reasonably designed to ensure compliance with all regulatory requirements.  Wedbush further did not have controls and procedures reasonably designed to restrict access to market access trading systems to person and accounts pre approved and authorized by the firm, and other failures to establish, document and maintain risk management controls.  Wedbush failed to provide review of market access controls and procedures, and file reports of suspicious trading activity, and willfully failed to do so.  (See SEC 3-15913).

Wedbush was fined $95,000 and censured for market orders at almost the close of trading that may have had the effect of manipulating the market.  Wedbush failed to comply with requirements governing the cancellation of market-on-close limit-on-close, and closing offset orders, that Wedbush had cancelled orders on the NYSE between 3:45 p.m. and 3:58 p.,. that were not the result of legitimate order errors.  The regulator found that Wedbush entered orders in the guise of actual orders, and the firm failed to observe high standards of commercial honor and just and equitable principles of trade.  (See NYSE 2012032742901).


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