Wedbush Fined for Failure to Supervise

Concerned about your investments with Wedbush Securities?

According to the Securities and Exchange Commission today, Wedbush Securities Inc. will reportedly pay a $250,000 penalty and has agreed to be censured to settle its failure to supervise charge in a pending administrative proceeding.

The broker-dealer allegedly ignored numerous red flags, according to the SEC’s March 2018 order, indicating that one of its registered representatives was involved in an alleged long-running pump-and-dump scheme targeting retail investors.

As we told you in March 2018, Wedbush purportedly failed reasonably to supervise Timary Delorme, who reportedly engaged in manipulative trading activity of penny stocks over multiple years.

Wedbush was reportedly aware of certain aspects of her alleged activity in 2012 and 2013 but its supervisory policies and implementation systems failed reasonably to guide staff on how to investigate the activity, according to the SEC’s order.

The firm reportedly conducted two flawed and insufficient investigations into the registered representative’s conduct, and failed to take appropriate action.

The settlement acknowledges remedial measures taken by Wedbush since March 2018, including changes made to senior leadership, revised policies and procedures, improved electronic surveillance, and the allocation of additional resources to internal and audit controls groups.

Investigating Potential Lawsuits

The White Law Group is investigating potential claims involving the liability that Wedbush Securities may have for failure to properly supervise former advisor Timary Delorme.

Brokerage firms have a legal responsibility to adequately supervise the business activities of their employees. If a broker engages in a scheme that misleads clients the brokerage firm that employs them may be liable for negligent supervision.

When brokers make unsuitable investment recommendations and squander client funds, the brokerage firm that employs them may be liable for failure to supervise and responsible for investment losses.

If you suffered losses investing with Timary Delorme and Wedbush Securities, The White Law Group may be able to help you by filing a FINRA Dispute Resolution Claim. For a free consultation with a securities attorney call 888-637-5510.

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Franklin, Tennessee.

For more information on The White Law Group, visit www.whitesecuritieslaw.com.