The Financial Industry Regulatory Authority Inc. Tuesday fined Wedbush Securities Inc. $900,000 for trading violations called "failed-to-deliver positions," which occur when a seller fails to deliver securities to the buyer when delivery is due.
Los Angeles-based Wedbush Securities has 550 registered reps in 69 branch offices. The firm has had a history of failing to supervise certain trades that resulted in scrutiny from regulators and penalties.
A Wedbush Securities spokesperson didn't return calls Wednesday morning to comment.
From January 2016 to July 2020, when Wedbush had a fail-to-deliver transaction, the firm's automated system attempted to identify the position and to borrow or recall shares to close out it out. If the automated system failed to acquire the shares, staff members were required to borrow, recall or buy-in shares to close out the position, according to Finra.
Wedbush Securities staff, however, fell short, according to Finra. They failed to timely recall shares that had been out on loan or executed buy-ins in which the firm initiated a stock loan recall but did not receive the shares in time to deliver them to the trade settlement system used by the National Securities Clearing Corp. to clear and settle securities transactions.
According to Finra, over the 4½ years, Wedbush Securities failed to appropriately close out approximately 2,056 such positions, as a result of the firm's failing to timely borrow shares, recall shares that were out on loan or otherwise acquire shares and deliver them in accordance with industry rules and standards.
Half of the $900,000 fine will be allocated to Finra, with the remaining amount allocated evenly among four exchanges. Wedbush Securities consented to Finra's findings without admitting or denying them. The firm has three months to submit a plan to Finra on how it will get itself into compliance on this issue in the future.
Edward W. Wedbush, founder of the firm, died in January 2020. He was 87.
Relationships are key to our business but advisors are often slow to engage in specific activities designed to foster them.
Whichever path you go down, act now while you're still in control.
Pro-bitcoin professionals, however, say the cryptocurrency has ushered in change.
“LPL has evolved significantly over the last decade and still wants to scale up,” says one industry executive.
Survey findings from the Nationwide Retirement Institute offers pearls of planning wisdom from 60- to 65-year-olds, as well as insights into concerns.
Streamline your outreach with Aidentified's AI-driven solutions
This season’s market volatility: Positioning for rate relief, income growth and the AI rebound
