We first began writing about Wedbush Securities in 2011. Back then, a headline indicating that Wedbush was ordered to pay $3.5 million to one of its own former employees. The amount alone was enough to warrant some investigation. It turns out that Wedbush has a long and sordid history with regulators. One that continues through today.
In the 2011 case, a Financial Industry Regulatory Authority (FINRA) arbitration panel ordered Wedbush to pay a former employee $3.5 million in back pay. Perhaps more telling, the panel called Wedbush’s actions towards its former employee a “morally reprehensible failure.” It turns out that this isn’t the only failure by Wedbush in recent years.
A search of FINRA disclosable events reveals the firm has recently been the subject of 174 disclosable events. That includes 111 regulatory events, 60 arbitrations and 2 civil events. Millions of dollars of judgments and arbitration awards have been entered against Wedbush – some for some very serious conduct. Breach of fiduciary duty, breach of contract, fraudulent activity and failure to supervise are among a few of the recent charges.
For its part, Wedbush has approximately 1000 brokers. Their website says they are dedicated to your financial success – the question is whether the company is rewarding the personal success of their customers or simply lining their own pockets.
Broker dealers have bad days just like the rest of us. Everyone makes mistakes and no firm can satisfy every investor. Any organization is liable to have the occasional rotten apple. Wedbush seems to be rife with them. Over a 100 violations claimed in recent years should be cause for concern.
Since this post was first written, Wedbush continues to disappoint both regulators and investors.
In 2016, an elderly California couple sought $247,000 from Wedbush and one of its brokers, Mark Augusta. They claimed the firm and Augusta engaged in “unsuitable recommendations; failure to supervise; constructive fraud, common law fraud and fraud by material misrepresentations/omissions; unjust enrichment; and elder financial abuse.” A FINRA arbitration panel awarded approximately $1.8 million including $1,080,000 in punitive damages for elder financial abuse. Despite the award, Wedbush went to court in an attempt to vacate the decision of the arbitrators. A Los Angeles Superior Court Judge refused and instead confirmed the award.
In 2018, the SEC accused Wedbush of failing to supervise a broker involved in a “pump and dump” penny stock scam.
In June 2019, the Wedbush paid $8.1 million to settle SEC charges that the brokerage firm failed to properly supervise its securities lending desk personnel. In September the company paid almost $2 million to settle additional SEC charges. Wedbush settled in both cases without any admission of guilt.
2020 was remarkably quiet for Wedbush. Hopefully they have learned their lesson.
Wedbush Securities Is Responsible for the Misconduct of its Brokers
Stockbrokers and their employers can be held responsible for lying to their clients, fraud and even improper markups on the products they sell. In the case of Wedbush, there seems to be many significant problems. If you purchased municipal securities or other investment products through Wedbush and lost money, contact us. You may be entitled to recoup any losses caused by their negligence.
Our stockbroker fraud lawyers have helped people across the United States. In most cases, we can represent you on a pure contingent fee basis meaning you need not worry about finding money for a lawyer. Minimum loss $100,000.
Mahany Law – Stockbroker Fraud Attorneys