Wedbush Securities and president Edward Wedbush lost its appeal of a 2012 complaint alleging failure to accurately and timely report earlier customer complaints, employee registration and failures related to supervision. As a result, the firm owes $300,000 and Wedbush himself $50,000 in fines for the misconduct. Wedbush also incurred hearing and appeal costs of over $16,000.
FINRA NAC Decision #20070094044
The August 2012 decision by FINRA's Office of Hearing Officers ordered a month-long suspension for President Wedbush along with $300,000 and $25,000 fines for the firm and its principal, respectively. Accordingly, by ordering a $50,000 fine, the review board effectively doubled Wedbush's personal punishment. Calling Wedbush's actions "reckless," the board also elected to suspend Wedbush in all principal capacities for 30 days, instead of still allowing him to supervise trading during the suspension.
According to the 2012 OHO decision, NYSE and FINRA both warned Wedbush on multiple occasions about regulatory reporting failures and regulators deemed Wedbush's "failure to remedy the reporting problems despite repeated warnings...an aggravating factor applicable to all violations."
These violations included a series of failures to file broker information forms pertaining to the reporting of complaints, arbitration claims or other regulatory and/or disciplinary actions, the filing of several forms with inaccurate information and additional failures related to disclosure of a settled federal civil case in which Wedbush personally paid over $234,000 in exchange for the case's dismissal.
For instance, Wedbush did not report a 2009 complaint that one of its brokers had committed unauthorized trades in a client's account until 2010—275 days after the customer first faxed his complaint to the firm.
During this period, Edward Wedbush was either the firm's Chief Compliance Officer or served in other supervisory capacities.
If you have invested with Wedbush Securities or with any other firm whose failure to adequately and timely respond to your complaints or concerns has 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.
News: Wedbush founder faces bigger penalty, suspension after losing appeal (InvestmentNews)