Articles Tagged with market manipulation

shutterstock_70999552The Financial Industry Regulatory Authority (FINRA) recently brought a complaint against brokerage firm Randor Research & Trading Company (Randor) and registered representatives William Scholander (Scholander) and Talman Harris (Harris) alleging that between February 2011, through March 2013, Radnor displayed a pattern of disregard of its supervisory obligations concerning reporting, disclosure, and compliance responsibilities. FINRA alleged that this disregard included the firm’s failure to report customer complaints, failure to update a registered representative’s Form U4 and failure to ensure that material information was disclosed to customers, and to maintain and enforce adequate supervisory systems and written procedures.

Radnor has been a member of FINRA since 2004, is based in the Philadelphia area and had one branch office in New York. The firm has 17 registered persons working in the two branches. Scholander has been registered with 13 different firms since 1998. Harris has been registered with 16 different firms since 1998. Harris was the branch manager of the New York office during the period.

FINRA alleged that in late 2011, Radnor failed to report two customer complaints made against its brokers. One customer claimed that certain trades were unauthorized and made a demand for damages. According to FINRA, another potential customer claimed that a broker of the firm had participated in unethical or illegal behavior possibly market manipulation. Despite those claims, FINRA claimed that Radnor chose not to report the complaints as required by FINRA rules. FINRA also alleged that Radnor also chose not to report the unauthorized trade complaint on the Form U4 of Scholander and Scholander knowingly failed to ensure that his Form U4 was timely updated to reflect the complaint. As a result, FINRA alleged that both Radnor and Scholander willfully violated the FINRA rules.

shutterstock_175320083This post continues our examination of the numerous regulatory actions against Wedbush Securities, Inc. (Wedbush) for its failure to supervise the activities of its employees in various respects.

In November 2014, the SEC’s case was settled with Wedbush and two of its top officials have for market access violations. Wedbush settled by admitting wrongdoing in its actions, paying a $2.44 million penalty, and retaining an independent consultant. Wedbush’s former executive vice president Jeffrey Bell (Bell) and senior vice president Christina Fillhart (Fillhart) settled without admitting or denying the SEC’s findings. Bell and Fillhart agreed to pay a combined total of more than $85,000 in disgorgement and penalties. The SEC order found that Wedbush had inadequate risk controls in place before providing customers with access to the market including some anonymous overseas traders.

In a statement, Andrew Ceresney, director of the SEC Enforcement Division stated that “Wedbush acknowledges that it granted access to thousands of overseas traders without having appropriate safeguards in place.”

shutterstock_160390625In a slew of regulatory actions, Wedbush Securities, Inc. (Wedbush) has the firm under fire for its failure to supervise the activities of its employees in various respects. These complaints were recently capped off with an affirmation by the Financial Industry Regulatory Authority’s (FINRA) appeals body, the National Adjudicatory Council (NAC), decision imposing more than $300,000 in fines and a month-long suspension of top executives for failures in their reporting duties. Decision Here.

Wedbush is a brokerage and investment banking firm founded by Edward Wedbush (Mr. Wedbush) and another individual in 1955. Wedbush registered with the NASD in 1955 and NYSE in the early 1970s. At present the firm employs approximately 900 employees. Mr. Wedbush joined the securities industry in 1955 when he formed the firm and has been registered as a general securities principal and representative since the firm’s inception.

A company’s culture is set at by those at the top running the company. And judging by the recent decision, Wedbush’s supervisory culture calls into question the handling of its client’s assets. The recent regulatory woes and saga first started on October 4, 2010, when FINRA’s Department of Enforcement filed a five-cause complaint alleging that during various periods between January 2005, and July 2010, Wedbush failed to properly report 81 disclosable events resulting in 38 Form RE-3 reporting violations, 113 Form U4 and U5 violations, and nine statistical reporting violations concerning customer complaints. FINRA also alleged that the firm and Mr. Wedbush failed to supervise the firm’s regulatory reporting.

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