SEC Accuses Wedbush Securities of Failing to Supervise

Posted on April 27th, 2018 at 4:45 PM
SEC Accuses Wedbush Securities of Failing to Supervise

From the Desk of Jim Eccleston at Eccleston Law LLC:

The SEC has fined Wedbush Securities Inc. for failing to supervise an employee despite indications that she was involved in a long-running pump-and-dump scheme.

According to the SEC, Wedbush Securities was aware that its registered representative, Timary Delorme was manipulating penny stock trading but the firm continued to allow her to solicit retail investors and process orders. Moreover, Delorme executed trades to manipulate the price and volume of stocks and in return, she received an undisclosed material benefit.

More specifically, the SEC asserted that Wedbush Securities ignored several red flags about Delorme’s scheme, including an email she sent out explaining her role in a securities fraud, and a FINRA inquiry regarding her personal trading history.  

As a result of its investigation, the SEC has barred Delorme from the industry and ordered her to pay $50,000 in penalties. In addition, the SEC has ordered Wedbush Securities to face a public hearing to investigate whether the firm lacked reasonable policies for supervising its representatives and conducted deficient investigations into Delorme's conduct.

The attorneys of Eccleston Law LLC represent investors and advisors nationwide in securities and employment matters. The securities lawyers at Eccleston Law also practice a variety of other areas of practice for financial investors and advisors including Securities FraudCompliance ProtectionBreach of Fiduciary DutyFINRA Matters, and much more. Our attorneys draw on a combined experience of nearly 65 years in delivering the highest quality legal services. If you are in need of legal services, contact us to schedule a one-on-one consultation today.

Related Attorneys: James J. Eccleston

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