In the ongoing saga of Wedbush Securities being accused of regulatory violations and customer abuses, FINRA now has fined the Los Angeles brokerage firm $20,000 and has required Wedbush to revise its written supervisory procedures. This time, FINRA found that some of Wedbush’s regulatory reports contained inaccurate, incomplete or improperly formatted data regarding certain brokerage orders. FINRA’s findings stated that Wedbush failed to provide written notification disclosing relevant information to customers regarding trade prices and commission charges. As part of its findings, FINRA noted that Wedbush’s supervisory system was not reasonably designed to achieve compliance with the relevant regulatory rule.
Given its long history of regulatory fines and censures, one would think that Wedbush would clean up its act. The integrity of the securities markets requires brokerage firms to comply with regulatory rules and not abuse customers. But Wedbush simply may view fines like the one discussed above to be nothing more than a cost of doing business. Unless and until the fines or suspensions are severe enough, Wedbush may have no financial incentive to change its ways.
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