FINRA's Department of Market Regulation charged Wedbush Securities Inc. and three employees—Peter Julius Augers, Shiva Naby and Samantha Arrieta McAfee—with deliberately creating and submitting fake municipal securities transaction report cards (MSRB cards) between January 1, 2010 and January 31, 2012 while accusing Wedbush Securities itself of continuing to violate FINRA conduct rules related to supervision through at least March 15, 2013, including the untimely reporting of 55 transactions with a total volume of $13.5 million.
Disciplinary Proceeding #20120320803-01
According to FINRA's complaint, Naby and Augers willfully fabricated the MSRB report cards by whiting-out information on the forms while adding meaningless supervisory signatures to give the false impression that Wedbush conducted supervisory reviews of the MSRB cards at an earlier (and compliant) time when, in fact, the firm had conducted no such supervisory reviews.
Naby and Augers allegedly whited-out date information pertaining to at least 55 municipal securities transactions that Wedbush failed to timely report between 2010 and 2012. The firm itself additionally failed to designate a registered principal to conduct supervisory reviews of this reporting activity until at least March 15, 2013.
As for McAfee, she served as Wedbush's Capital Markets Business Conduct Officer, which is a compliance role. As such, she allegedly submitted the fake MSRB report cards after receiving them from Naby. The investigation states that when Naby failed to include copies or other evidence of firm supervisory reviews in a first submission, McAfee requested this documentation in the form of a supervisory signature.
Even though he was not responsible for the MSRB report cards and had not conducted any supervisory reviews of the documents, Augers nonetheless signed the reports and McAfee produced those falsified documents to FINRA.
Further technical investigation revealed that Wedbush only requested the forms and reports from the MSRB website pertaining to proof of supervision after FINRA first began investigating the firm for allegedly failing to supervise and failing to possess said forms.
FINRA's complaint states that "after being confronted...the respondents admitted that the report generated dates and date footers had been whited-out...and that the firm had not conducted any supervisory reviews of MSRB Report Cards during the review period."
FINRA's investigation also concluded that Naby had shredded and discarded the original reports and sent modified documents to FINRA, using McAfee's name in her FedEx delivery.
As such, FINRA filed former complaints against Wedbush Securities, Augers, Naby and McAfee, accusing the team of falsifying records, producing falsified and misleading documents, untimely reporting of municipal bonds and failure to supervise municipal bond reporting.
If you have invested with Wedbush Securities, Peter Julius Augers, Shiva Naby, Samantha McAfee or with any broker, financial adviser or firm whose untimely reporting, fabrication of documents, or supervisory failures have proven harmful to your investments or interests, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for investigation and consultation.