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Wedbush Securities Allegedly Still Really Bad At Supervising Stuff

Wedbush Securities Allegedly Still Really Bad At Supervising Stuff

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A few years ago, Wedbush Securities found itself on the wrong side of its regulators for allegedly throwing open the doors to the markets to whoever (allegedly) wanted to quietly and anonymously manipulate markets, short naked, that kind of thing. This was (allegedly) in no small part Wedbush’s fault, since, according to the SEC and FINRA, its compliance program consisted mainly of having customers tell on themselves, while its compliance officers were essentially paid on commission based on how many trades their customers made. But it was also, as old friend Matt Levine noted, kind of the SEC’s fault, because all of the above would have been fine if, in fact, Wedbush’s customers had told the firm about all of the allegedly illicit shit they were doing.

This time, however, the SEC has found fault with Wedbush that it cannot be said to share. For Wedbush still allegedly sucks at keeping tabs on what is going on, only this time, the allegedly nefarious goings-on were the work of one of its own.

The regulator alleged that Wedbush ignored numerous red flags raised against the conduct of employee Timary Delorme, including a customer email tip. Wedbush also conducted “two flawed and insufficient investigations” into Ms. Delorme, according to the SEC….

According to the SEC, Ms. Delorme engaged in specific trades aimed at manipulating the price and volume of stocks. In return, she received undisclosed benefits from a third party. She allegedly worked with that third party, who initially originated the plot, from July 2008 to early 2014.

SEC Charges Wedbush in ‘Pump-and-Dump’ Scheme [WSJ]

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