Wedbush to pay $250,000 penalty to settle SEC charges
Firm also censured for ignoring 'red flags' of pump-and-dump scheme.
Wedbush Securities will pay a $250,000 penalty and has agreed to be censured by the Securities and Exchange Commission to settle a pending administrative proceeding in which it was charged with failure to supervise.
In its March 2018 order instituting proceedings, the SEC said that Wedbush “ignored numerous red flags indicating that one of its registered representatives was involved in a long-running pump-and-dump scheme targeting retail investors.”
(More: Merrill Lynch no longer will accept penny stock trades)
Wedbush conducted “two flawed and insufficient investigations” into the broker’s conduct, and “failed to take appropriate action,” the SEC said in a release.
Since then, Wedbush has made changes made to its senior leadership, revised policies and procedures, improved electronic surveillance, and allocated additional resources to internal and audit controls groups — moves that the SEC said the settlement acknowledges.
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