Wedbush Securities Inc. (“Wedbush Securities”) (CRD# 877) has many different complaints filed by FINRA (Financial Industry Regulatory Authority), state regulatory organizations, and investors such as yourself. At the Law Offices of Robert Wayne Pearce, we have investigated Wedbush Securities, its regulatory and customer complaints, and have also represented investors with claims of fraud, negligence, and breach of fiduciary duty against this organization and its financial advisors.
If you believe you have a claim against Wedbush Securities, you should strongly consider hiring an investment fraud lawyer. You should not wait until it’s too late to file a claim. The Law Offices of Robert Wayne Pearce, P.A., offers free consultations. Give us a call at 800-732-2889. Let’s discuss your case and see what we can do to help you get the compensation you need and deserve.
Can I Sue Wedbush Securities?
If you’ve lost money caused by Wedbush Securities and/or its employees’ misconduct then the answer is, YES, you can sue Wedbush Securities but the odds are you signed away your right to sue in court and agreed to resolve your dispute in a FINRA arbitration proceeding. Attorney Robert Wayne Pearce has over 40 years of personal experience in FINRA arbitration proceedings and knows very well how you can not only sue Wedbush Securities in FINRA arbitration proceedings, but WIN that arbitration. The easiest way to know if you have a viable case against Wedbush Securities is to call Attorney Pearce at our office at 800-732-2889.
What is Wedbush Securities?
Wedbush Securities (CRD# 877) is a registered broker-dealer. It operates as a full-service independent broker-dealer, providing a range of financial products and services to individual investors and financial advisors.
As a registered broker-dealer, Wedbush Securities is subject to regulations and oversight by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). It is required to comply with industry standards and regulations to ensure the protection of its clients’ interests.
A failure to comply with industry standards by either its brokers or the firm itself can result in disciplinary actions, fines, or other penalties imposed by regulatory authorities.
Wedbush Securities Has Many Different Regulatory Problems
Wedbush Securities’ rapid growth has not been without consequences. There have been approximately 197 state and self-regulatory body disclosure events; that is, final and formal proceedings initiated by a regulatory authority (e.g., a state or federal securities agency like the U.S. Securities and Exchange Commission (SEC) or self-regulatory body like the Financial Industry Regulatory Authority (FINRA) for a violation(s) of investment-related rules or regulations. In addition, there have been hundreds of customer complaints filed against Wedbush Securities for misconduct by its securities sales and investment advisory representatives that are not reported by the firm on its Central Depository Record.
We have reported and written about these regulatory problems and customer complaints over many years. Wedbush Securities is a repeat offender: there are over 197 FINRA-reported disciplinary proceedings citing the firm with one form of supervisory lapses or another.
A Brief Overview of Some of the Regulatory Problems Wedbush Securities Has Faced Over the Years*
Wedbush Securities has been repeatedly censured, warned, and fined multi-millions of dollars for its own misconduct and failure to supervise its army of financial advisors.* A few of the notable FINRA Sanctions for its Supervisory Failures are below:
Wedbush Securities Inc. Fined $1.5 Million by FINRA for Rule Violations
Brief Overview: The Financial Industry Regulatory Authority (FINRA) has fined Wedbush Securities Inc. $1.5 million for violating the Securities and Exchange Commission’s (SEC) Customer Protection and Net Capital Rules, as well as for related supervisory and books and records failures. The SEC Customer Protection Rule aims to safeguard customers’ funds and securities by requiring broker-dealers to have physical possession or control over certain securities and maintain a reserve of cash or qualified securities in a bank account to cover the net cash owed to customers. Wedbush Securities’ failure to comply with these rules resulted in the fine imposed by FINRA.
FINRA Fines Wedbush $975K Over Trade Supervision Lapses
Brief Overview: Wedbush Securities, a Los Angeles-based broker/dealer, has been fined $975,000 by the Financial Industry Regulatory Authority (FINRA) for failing to properly supervise trades executed by third-party broker/dealers. The firm mistakenly believed that the third-party broker/dealers were responsible for detecting potential market manipulation. This is not the first time Wedbush has faced regulatory scrutiny, as it has previously been fined for similar lapses, including failure to implement risk controls and detect manipulative trades. As a result of previous actions, Wedbush ceased offering market access services to customers but continued to allow electronic trading customers to access third-party platforms for trade execution.
Wedbush Securities Charged with Unregistered Sales of Microcap Securities and Failing to Report Suspicious Transactions
Brief Overview: Wedbush Securities Inc., a California-based broker-dealer, has agreed to pay more than $1.2 million to settle charges brought by the Securities and Exchange Commission (SEC) for engaging in unlawful unregistered distribution of nearly 100 million shares of over 50 different low-priced microcap companies. The charges also include Wedbush’s failure to file suspicious activity reports (SARs) for certain transactions executed on behalf of an offshore customer, Silverton SA (also known as Wintercap SA). The SEC found that Wedbush did not conduct a reasonable inquiry into the facts surrounding the sales, leading to the disqualification of the usual exemption from registration that applies to brokers’ transactions. Additionally, Wedbush failed to file SARs for transactions suspected to involve fraudulent activity, despite identifying red flags in its written guidance to employees.
*Above are only some of the regulatory disciplinary actions filed against Wedbush Securities by FINRA. NASSA and other state securities regulator investigations and enforcement actions account for another 197 BrokerCheck disclosures.
Wedbush Securities Customer Complaints
There have been scores of customer complaints filed against Wedbush Securities stockbrokers and investment advisors over the years. We have launched many investigations of current and former Wedbush Securities advisors:
- Michael Sims of Wedbush Securities Inc.
- Andrew Lee of Wedbush Securities Inc.
- Bartholomew McDonald formerly with Wedbush Securities Inc.
- John Wyshak of Raymond James & Associates, Inc
- Scott Smallman Of Wedbush Securities
- Mark Bluestein of Wedbush Securities
- Kenneth Hutkin of Wedbush Securities
- Kenneth Hutkin of Wedbush Securities
- Joel Farnsworth of Wedbush Securities
- Arthur Hoffman formerly with Ameriprise Financial Services
- David Hirons of Wedbush Securities
- Antoni Lucas of Wedbush Securities
- Gustavo Miramontes of Oppenheimer & Co.
- Carol Munoz of Wedbush Securities Inc.
- Joseph Whitney formerly with Wedbush Securities Inc
- Michael Johnson formerly with Wedbush Securities Inc.
- William Heiden formerly with Wedbush Securities Inc.
If you have lost money investing with any of these Wedbush Securities advisors or others within this brokerage firm, it’s important that you reach out to an investment loss attorney quickly because the statutes of limitations can bar your claims. Call us at 800-732-2889.
Why Does Wedbush Securities Have So Many Regulatory Problems And Customer Complaints?
Independent broker-dealers are notorious for their lax supervisory practices and procedures. The business model of these franchise type operations is to open many offices nationwide for steady growth of fixed monthly revenues without the costs attendant to a full-service branch office with on-site manager, compliance officer and operation personnel. The registered representatives of these independent broker-dealers generally operate as separately incorporated businesses. They are not employees of the broker-dealer and therefore not controlled in the same manner as full-service brokerage firm representatives. The registered representatives control their structure and costs to maximize profits and often leave the protection of investors’ rights and interests as their lowest priority.
The typical supervisory organization of independent broker-dealer operations is to have other independent contractors operate Offices of Supervisory Jurisdiction (OSJs) to monitor the registered representatives from geographically remote offices and then report to the main franchisor’s compliance office at national headquarters. The supervisors at the OSJs are not employees of the franchisor and often run their own brokerage, insurance and other businesses. They are not devoted full-time supervisors of the smaller branch offices. Consequently, OSJ managers cannot and do not supervise the day-to-day operations of the registered representatives of these Independent broker-dealers.
Generally, there is no immediate review of new accounts opened, securities transactions, business records, cash or securities receipts and deliveries, correspondence and business activities unrelated to the securities brokerage operation at these independent brokerage firms. The lax supervision leaves investors who have transferred their accounts to the smaller independent broker-dealer vulnerable to sales of securities that have not been reviewed or authorized by anyone other than the sales representative earning a commission. There may be no one onsite to detect forgeries of clients’ signatures on documents, the placement of inaccurate information about a client’s investment objectives and financial condition to document the suitability of a particular investment recommendation. Oftentimes there is no daily review of sales literature and client correspondence to protect against misrepresentations and misleading statements being made to investors. In fact, it is not unusual for there to be only one compliance audit visit per year at many of these offices.
These Independent brokerage business operations are worrisome to the North American Securities Administrators Association (NASAA), which has documented more instances of sales abuse and consequently investor losses at these firms than the traditional brokerage firms with branch offices with on-site managers and compliance personnel.
Did Wedbush Securities Advisor Misconduct Cause You Investment Losses?
When financial advisor misconduct has caused you to lose substantial value to your investment accounts, you have the right to seek reimbursement from the responsible parties. Wedbush Securities is responsible like any employer for its financial advisors acts and omissions. In addition, it has an independent duty to supervise its stockbrokers and investment advisors. These cases can be extremely complex, and so having the support of a reputable attorney who is experienced in recovering investment losses for investors is key to your success. Many customers make the mistake of contacting Wedbush Securities without representation with an attorney about their complaints and have their complaints denied.
Related Read: Can You Sue Your Brokerage Firm?
Consult With An Attorney Who Recovers Investment Losses Caused By Wedbush Securities Today!
The investment loss attorneys at The Law Offices of Robert Wayne Pearce, P.A., have helped countless investors over the last 40 years recover the losses from their investment accounts that were caused by broker negligence or misconduct. The firm has extensive experience with Wedbush Securities cases, and Attorney Pearce is committed to seeing that those responsible for the losses you have suffered are held fully accountable.
Give us a call at 800-732-2889. Let’s discuss your case and see what we can do to help you get the compensation you need and deserve.