Los Angeles, California-based brokerage firm Wedbush Securities Inc. faces yet another regulatory complaint. NYSE Regulation has alleged that Wedbush Securities failed to supervise the trading activity of the firm’s owner and founder, Edward W. Wedbush.
Edward Wedbush Actively Trading without Supervision
Ed Wedbush purported actively manages the investments in approximately 70 different brokerage accounts, including those held in the names of his wife, sister, brother, other relatives, and friends, as well as a Wedbush director, a firm employee, and the spouse of another employee. Consistent with its long history of disciplinary actions and regulatory fines relating to improper supervision, the brokerage firm allegedly failed to supervise Ed Webush’s trading in the numerous accounts that he controlled.
NYSE Regulation alleges that Wedbush Securities’ lack of adequate supervision over its owner’s trading conduct allows for possible conflicts of interest and potentially manipulative activity. By having unchecked trading abilities, Ed Wedbush could have granted preferential treatment, without regard to fairness or regulations.
Wedbush Securities NYSE Complaint Filed
The lawsuit alleges that Ed Wedbush and another Wedbush Securities employee would aggregate shares of certain securities that were bought or sold and conducted a volume-weighted average price calculation. Based on the calculation, Ed Wedbush allegedly then determined which of the 70 accounts would be assigned each trade. His method for determining the allocations was not disclosed, documented, or supervised.
The "abject failure" of Wedbush Securities to supervise Mr. Wedbush's trading "continued for years," according to the complaint.
FINRA Early Investigations
Opened in 1955, Wedbush Securities has more than 400 brokers and reported total shareholder equity of $259 million at the end of June. The firm has repeatedly been fined for failure to properly supervise brokers.
Last year, FINRA, along with Nasdaq Stock Market Inc., fined Wedbush Securities $675,000 for supervisory violations related to the trading of leveraged exchange-traded funds. And in 2016, the SEC upheld a $50,000 FINRA order against Wedbush for extensive and widespread supervisory deficiencies related to regulatory filings. He was suspended for 31 days.
In total, Wedbush Securities has paid a total of $4.1 million for supervisory failures over the last decade.
Have You Lost Money with Wedbush Securities?
If you believe you have been the victim of stockbroker misconduct at Wedbush Securities, you may have certain legal rights that require your immediate attention.
Dimond Kaplan & Rothstein’s stockbroker negligence and investment fraud lawyers have represented numerous Wedbush Securities customers and have successfully recovered investment losses that resulted from Wedbush Securities’ negligence.
Call an Investment Fraud Attorney Today
If you are looking for an securities fraud attorney to review your rights and options, the investment fraud lawyers at Dimond Kaplan & Rothstein, P.A. have recovered more than $100 million from banks and brokerage firms for their wrongful actions.