Wedbush Securities Accused of “Egregious” Supervisory Failures, and Anti-Money Laundering Violations

New York investor rights attorneyWedbush Securities, headquartered in Los Angeles, failed to adequately supervise and control anti-money laundering procedures, a FINRA complaint alleges. It also reports that from January 2008 through August 2013, Wedbush did not put enough of its resources towards risk-management controls and procedures, failed to comply with securities industry notifications about warning signs in their trading accounts, and had a potential conflict of interest in its employee compensation plan. At the time, the firm was one of the largest market access providers, making profits in the millions of dollars.

Wedbush Reportedly Flooded Exchanges with Thousands of Manipulative Trades

Wedbush did not employ enough resources to regulate trade controls, and thus allowed its customers to infiltrate U.S. Exchanges, make thousands of trades that could have been manipulative, and may have even involved spoofing and layering, practices which artificially alter market movement, and its supply and demand, FINRA contends.

Wedbush Failed to Develop and Implement an Appropriate Written Anti-money Laundering (AML) Program

Wedbush did not comply with requirements of the Bank Secrecy Act, FINRA reports. Their AML program did not bear in mind market access of customers’ trading activities, thus not meeting minimal regulatory AML requirements. Wedbush’s procedures for compliance failed to provide for the monitoring, detection, and reporting of suspicious and potentially manipulative transactions by its direct market access customers, FINRA alleges. The complaint also maintains that Wedbush routinely ignored alerts from regulators and Exchanges about suspicious and potentially cunning customer transactions. Furthermore, the Firm did not have a relevant process for investigating suspicious activity and filing appropriate suspicious activity reports (SARs), as required by law.

Investment Fraud Lawyers Investigating

The Peiffer Rosca securities attorneys often represent investors who lose money as a result of Ponzi schemes, investment fraud, or stockbroker misconduct. They are currently investigating the possibility of assisting victims with the recovery of their losses. They take most cases of this type on a contingency fee basis and advance the case costs, and only get paid for their fees and costs out of money they recover for their clients.

Investors who believe they lost money as a result of investment fraud or misconduct may contact the securities lawyers at Peiffer Rosca, Jason Kane or Joe Peiffer, for a free, no-obligation evaluation of their recovery options, at (585) 310-5140.

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In our legal system, every person is innocent until and unless found guilty by a court of law or a tribunal. Whenever we reference “allegations” or charges that are “alleged,” such allegations or charges have not been proven, and are merely accusations, not findings of fault, as of the date of the blog. We do not have, nor do we undertake, a duty to continue to monitor or follow cases about which we report, and/or to publish subsequent blogs regarding various developments that may occur in such cases. Readers are encouraged to conduct their own research regarding any such cases and any developments that may or may not have occurred in such cases.