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Wedbush Securities Inc.

Background Information

Wedbush Securities is a financial services and investment firms providing private and institutional brokerage, investment banking, research, clearing and execution, private capital, commercial banking, and asset management to individual, institutional and issuing clients. The firm was founded in 1955 and is headquartered in Los Angeles, California.

Regulatory Violations

Wedbush has been the subject of numerous regulatory investigations which have resulted in disciplinary actions by regulators.

Wedbush Settles With SEC in Market Access Violations Case

In November, 2014, Wedbush agreed to settle an SEC case for market access violations by admitting wrongdoing, paying a $2.44 million penalty, and retaining an independent consultant. The case alleged that Wedbush failed to maintain direct and exclusive control over settings in trading platforms used by its customers to send orders to the markets, thus providing market access to overseas traders without preapproval and without ensuring that they complied with U.S. law. These trades produced high fees and commissions for Wedbush.

Repeated OATS Reporting and Supervision Violations

The firm has been the subject of many disciplinary actions by FINRA for violations of rules applicable to OATS reporting, including a censure and fine of $750,000 in 2013 for several billion violations of OATS reporting rules, a censure and fine of $7,500 in October 2010, a censure and fine of $7,500 in April 2010, a censure and fine of $25,000 in November 2008 and a censure and fines of $30,000 for two actions in September 2008. In addition, the firm has been the subject of many disciplinary actions by FINRA for supervisory failures, including a censure and fine of $375,000 in September 2012 for, among other things, failing to establish, maintain and enforce a supervisory system and written supervisory procedures related to the firm’s variable annuity business. Wedbush was also fined $300,000 in August 2012 for reporting failures and failing to supervise its registration reporting. In this matter, Edward Wedbush, the President of Wedbush Securities was also fined $50,000 personally and suspended from all principal capactities for 31 days.

Over $7 Million in Corporate Bonds Tendered Erroneously

Wedbush was censured and fined by FINRA in December 2011 for failure to promptly obtain and maintain possession or control over approximately $7.3 million in fully-paid customer securities, specifically corporate bonds. This occurred because an employee at a Wedbush branch office erroneously tendered the corporate bonds held in five customer accounts. This failure to obtain and maintain possession or control over customer securities is a violation of FINRA rules.

FINRA Arbitrations

Wedbush Securities, Inc. has been the subject of many FINRA arbitration claims which have resulted in awards to claimants.

Party Awarded Compensatory Damages, Interest, Attorneys’ Fees and Costs in Ponzi Scheme Claim

In a claim related to the Provident Royalties, LLC Ponzi Scheme, the claimant was awarded compensatory damages and interest of $127,500, plus attorneys’ fees and costs. Allegations against Wedbush include breach of fiduciary duty, breach of contract, failure to supervise and negligence. In addition, a claim for violation of the California Securities Law and Elder Abuse Law was asserted.

Wedbush Securities Inc and Edward Willaim Wedbush Found Jointly and Severally Liable in an Employment-Related Claim

A former employee of Wedbush was awarded compensatory damages, interest, punitive damages and costs of approximately $434,000 in a claim brought when Wedbush allegedly blocked the transfer of the claimant’s personal investment accounts to another brokerage firm after the employment relationship ended. The punitive damages were awarded because the panel found that the “unjustifiable” withholding of all funds in the claimant’s accounts was oppressively designed to gain an unfair advantage over claimant with respect to possible future damages assessments. Wedbush presented no evidentiary basis to justify holding claimant’s funds “hostage”.

Award in Unauthorized Activity Claim

In claim alleging of breach of fiduciary duty, breach of contract, constructive fraud, failure to supervise and violation of securities laws and rules of fair practice, the claimant was awarded over $350,000 in compensatory damages and attorneys’ fees. This claim was related to allegations of unauthorized activity in claimant’s account.

Silver Law Group

Silver Law Group is a nationally recognized securities and investment fraud law firm with Martindale-Hubbell® Peer Review Ratings™ “AV” rated lawyers that handle all securities arbitration matters on a contingency fee basis. The Law Firm, at no cost to investors will review account activity and account statements to determine whether there was any misconduct, whether there are damages and the legal causes of action. We investigate all sales practice violations, while taking into consideration the investor’s age, investment background, and the relationship between the investor and the brokerage firm and its financial advisor. According to securities industry rules and regulations, unsuitable investment advice, securities concentration, fraudulent misrepresentations and omissions of material facts, breach of fiduciary duty, conflicts of interest, variable annuity switching are among the causes of action that may be available to investors in claims for damages against brokerage firms and their financial advisors in a securities arbitration claim filed with the Financial Industry Regulatory Authority (FINRA). We represent investors in FINRA arbitration claims on a contingency fee basis.

To learn more call us at (954) 755-4799 or Toll Free at (800) 975-4345

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