We have blogged many times over the past several years about various misconduct committed by Los Angeles brokerage firm, Wedbush Securities, and the numerous regulatory fines that FINRA has issued against them. One of those blogs concerned the Aug. 2012 $25,000 fine and suspension of Wedbush founder, Edward Wedbush.
Wedbush Founder Loses Appeal, Faces Bigger Fine and Broader Suspension
Apparently displaying disdain for FINRA’s disciplinary ruling, Wedbush has appealed his fine and suspension. Well, rather than overturn or uphold FINRA’s original disciplinary ruling, on Dec. 11, 2014, the National Adjudicatory Council, a FINRA appellate body, issued even harsher sanctions by doubling Wedbush’s fine and broadening the scope of Mr. Wedbush’s suspension for its securities fraud.
The original suspension only prohibited Wedbush from engaging in certain functions. But the FINRA appellate body found Mr. Wedbush’s conduct to be worthy of an even harsher punishment. The original suspension would have allowed Mr. Wedbush to continue to supervise trading and entry of customer orders. The new suspension, however, prohibits him from engaging in those activities and all other principal capacities for 31 days. Mr. Wedbush’s fine also was doubled to $50,000. The FINRA review panel also upheld a $300,000 fine against Wedbush Securities for failing to implement proper supervisory procedures.
The FINRA appellate panel stated that it believed that Wedbush’s misconduct “demonstrates a troubling disregard for supervision in general.” Moreover, although Wedbush argued in the appeal that Mr. Wedbush was not individually responsible for the violations at issue, the appellate panel disagreed, citing to Wedbush’s “refusal to acknowledge his supervisory responsibility as [President] of the firm.” Not only was he the President of the brokerage firm, but he also served stints as chief compliance officer and business conduct manager.
Edward Wedbush Shows Lack of Concern for FINRA Rules
We believe that the circumstances underlying numerous FINRA arbitration claims against Wedbush reflect that they simply aren’t concerned with its obligations to customers or its duties to comply with regulatory rules. Wedbush’s appeal displays what we believe is even further evidence of Wedbush’s lack of concern for the rules.
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