Wedbush Settles with SEC for $250,000 Over Supervisory Failures
The SEC has settled with Wedbush Securities for $250,000 over the firm’s failure to supervise one of its employees, the regulator says.
Last March, the SEC charged Wedbush for supervisory failures involving an employee who was allegedly running a pump-and-dump scheme.
At the time, the regulator called the firm a “recidivist broker-dealer” because it was the SEC’s third action against it since 2014.
On Wednesday, Wedbush agreed to be censured to settle the pending administrative proceeding and to pay a $250,000 penalty, the SEC says in a press release.
The regulator acknowledges measures Wedbush has taken to remediate the issue since last March, including revising its polices and procedures, improvements to electronic surveillance, investment in internal and audit control groups and senior leadership changes, according to the press release.
“Wedbush abandoned important responsibilities to its customers by looking the other way in the face of mounting evidence of manipulative conduct,” Marc Berger, director of the SEC’s New York regional office, says in the press release. “After we filed our claim, Wedbush made significant changes aimed at reforming its practices to detect and report misconduct within its ranks.”
The same day, Wedbush issued a press release, saying the administrative proceeding was tied to conduct prior to October 2014.
"The Firm takes very seriously its responsibility to supervise our financial advisors and we are appreciative of the SEC in helping us identify insufficiencies in our detection and reporting procedures and systems,” co-presidents Rich Jablonski and Gary Wedbush said in the joint statement. “We are confident these issues are fully rectified.”
Also the same day, Wedbush announced it had appointed a new head of wealth management and a new director of operations.
Christopher Mone is now the firm’s executive vice president and head of wealth management.
He will report to Jablonski and Wedbush and will oversee the firm’s entire private wealth management business, Wedbush says.
Mone joins from Wilmington Trust, where he was president of U.S markets in the firm’s wealth advice business, according to the press release.
The company also appointed Jim Richards to the new role of director of operations in wealth management, according to the press release. He will report to Mone, according to Wedbush.