The Financial Industry Regulatory Authority (FINRA) has filed yet another complaint against Los Angeles brokerage firm Wedbush Securities Inc. FINRA has alleged that Wedbush risked more than $200 million in customer assets by underfunding its customer reserve account. FINRA’s Customer Protection Rule requires brokerage firms to have enough securities or cash in reserve to ensure customers’ assets are promptly returned in the event of insolvency. If FINRA’s allegations are correct, then Wedbush failed to ensure that its customers were protected.
Wedbush Supervisory System Was Not Maintained
At its heart, Wedbush is accused of failing to maintain required reserves and failing to have proper supervisory systems in place to ensure that its reserve requirements were met. Despite warnings that its supervisory systems were lacking, FINRA claims that Wedbush engaged in misconduct, and allegedly violated its obligations repeatedly from 2009 through 2012.
This is the latest of Wedbush’s long history of regulatory problems, including repeated supervisory and investor-abuse problems. Based on Wedbush’s repeated regulatory fines and FINRA arbitration findings of customer abuses, we believe that Wedbush has no concern for its obligations owed to investors or for securities industry rules.
Contact A Securities Fraud Attorney Today
Our law firm has represented numerous Wedbush Securities customers in Los Angeles FINRA arbitration cases involving Wedbush negligence and Los Angeles broker fraud.
If you lost money as a result of the failure of the Wedbush supervisory system call our Los Angeles broker negligence lawyers for a free case evaluation, as you may have certain legal rights that require immediate action.
Dimond Kaplan & Rothstein, P.A. has recovered more than $100 million from banks and brokerage firms for investment fraud and stockbroker misconduct. Contact us today to schedule an appointment or FREE consultation with one of our experienced attorneys.