Securities Arbitration Lawyers BlogNYSE Brings Action Against Edward Wedbush and Wedbush Securities
Wedbush Securities is in hot water with the SEC, FINRA, and the New York Stock Exchange for a scheme involving its owner and founder, Edward Wedbush. Mr. Wedbush was allegedly employing a manipulative trading scheme involving over 70 accounts at Wedbush Securities. The trading practice, often referred to as “cherry-picking,” occurs when “traders choose to allocate the best performing trades to their own or preferred accounts.”
According to the NYSE’s complaint, Mr. Wedbush’s scheme involved instructing an employee to execute trades in a general account, and then he would later allocate the trades to various accounts that he controlled. No other employees at the firm were permitted to make these “post-execution allocations.” Mr. Wedbush also executed these trades on a separate trading platform that was not used by other traders at the firm.
The firm allowed Mr. Wedbush to exercise this discretion and had no procedures in place to ensure that the allocations were not made for improper purposes, like steering the more profitable trades into Mr. Wedbush’s controlled accounts. NYSE alleges this lack of supervision violated both SEC and NYSE rules. The firm failed to establish and maintain adequate written supervisory procedures, and failed to retain adequate books and records. The firm’s Co-Chief Compliance Officer even raised concerns over Mr. Wedbush’s trading activity, yet the firm still “took no meaningful action.”
This is not Mr. Wedbush’s first time on the regulatory agencies’ radar. In 2010, FINRA brought a regulatory action against Mr. Wedbush in his capacity as president of Wedbush Securities for failure to establish and maintain adequate supervisory procedures. Specifically, FINRA alleged that Mr. Wedbush “failed to follow up on information he received regarding dilatory findings to ensure that the firm’s system in place to file registration disclosures was adequate.”
Contact Our Firm if You’ve Invested with Wedbush Securities
If you invested with Wedbush Securities and believe you have lost money due to its misconduct, you may be able to file a claim to recover your losses through FINRA arbitration. For a free evaluation of your potential case by a securities attorney, please contact Silver Law Group.
Silver Law Group is a nationally-recognized securities law firm headquartered in South Florida representing investors worldwide with their claims for losses due to securities and investment fraud. The firm has successfully recovered multi-million dollar awards for its clients through securities arbitration and the courts. To contact Scott L. Silver to discuss your legal matter, call toll-free (800) 975-4345 or e-mail him at SSilver@silverlaw.com.