The SEC Hits Wedbush Securities with more than $1.2 Million for Supervisory Issues with Microcap Companies
According to a press release, Wedbush Securities, a broker-dealer headquartered in Los Angeles, is paying more than $1.2 million to settle charges by the Securities and Exchange Commission for allegedly unlawfully distributing nearly 100 million unregistered shares of more than 50 different low-priced microcap companies.
The SEC reportedly said the firm also failed to file suspicious activity reports in connection with the transactions in question.
Between January 2017 and September 2018, Wedbush purportedly engaged in unregistered offers and sales of large blocks of low-priced securities that were part of the allegedly unlawful, unregistered distribution of securities by Silverton SA, also known as Wintercap SA, a former offshore customer, according to the complaint. Wedbush reportedly failed to conduct a reasonable inquiry into the facts surrounding the sales, and therefore its offers and sales did not qualify for the usual exemption from registration that applies to brokers’ transactions, according to the regulator.
Wedbush agreed to pay payment of disgorgement and prejudgment interest of over $207,000, and a civil penalty of $1 million, without admitting or denying the findings.
This is not the first time that Wedbush Securities has been in trouble with regulators. To learn more about the firm’s investigations, please see:
Wedbush Securities- Broker Misconduct, Customer Complaints and Regulatory Actions
Wedbush Fined for Failure to Supervise
FINRA Hits Wedbush Securities with $1.4 Million for Elder Abuse
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Last modified: December 17, 2021
