Edward William Wedbush of New York New York the President and Chairman of Wedbush Inc. (the parent company of Wedbush Securities Inc.) and registered representative of Wedbush Securities Inc. and Lime Brokerage LLC has been named in a Financial Industry Regulatory Authority (FINRA) Wells Notice in which FINRA made an initial decision to advise that a disciplinary proceeding be commenced against him for engaging in fraudulent activities in violation of federal securities laws and FINRA rules. Wells Notice Examination Nos. 20180582029; 2016051148 (Oct. 21, 2018)
He is the same Edward Wedbush of Los Angles Times fame: of “Edward Wedbush’s roof leaks, but his wallet doesn’t,” and is well known in the industry by people like us.
FINRA Public Disclosure stated that Wedbush possibly violated Securities Exchange Act of 1934 Section 10(b), SEC Rule 10b-5, as well as FINRA Rules 2010, 2020, 4511, 3110 and 4210.
This is not the first time that Edward Wedbush has been subject of a regulatory action for alleged misconduct in the securities industry. Particularly, Edward Wedbush was named in a FINRA Complaint that alleged that Wedbush Securities Inc. failed to supervise his unauthorized activities.
According to the Complaint, Edward Wedbush exercised discretionary authority in at least seventy accounts, several of which constituted of customer accounts and proprietary accounts, where he engaged in active management and trading of those accounts. The Complaint stated that the proprietary accounts were owned by Wedbush Securities Inc., its parent company, and affiliates of Wedbush Securities, Inc.. Apparently, Wedbush Securities Inc. neglected to set forth a process to supervise Edward Wedbush’s trading activities, which included executions of trades and allocations of trades in accounts that he controlled.
The firm evidently failed to monitor Edward Wedbush’s activities for possible manipulative activities and conflicts of interest. FINRA alleged that the firm’s supervisory failures enabled Edward Wedbush to engage in impermissible activities. Edward Wedbush allegedly routinely ordered an employee of the firm to make trades and then waited until the close of trading days to allocate his executed trades among customer accounts, personal accounts and proprietary accounts. The Complaint stated that Edward Wedbush utilized his discretionary authority in making allocations of those trades in the accounts he controlled. Apparently, the firm did not utilize a process to make sure that profitable trades had not been inappropriately allocated within accounts under Edward Wedbush’s control.
FINRA Public Disclosure records also reveal that Edward Wedbush has been subject of a civil action brought by the United States Department of Labor in the United States District Court for the Central District of California which settled by way of Edward Wedbush being fined and paying $2,090,909.09 in restitution founded on accusations that Edward Wedbush, inter alia, engaged in unauthorized transactions and violated fiduciary duties with regard to equities and direct participation program or limited partnership interest transactions. Civil Action No. 2:17-CV-2471 (Jan. 29, 2018).
Furthermore, Edward Wedbush was named in a customer initiated investment related arbitration claim in which the customer was awarded $1,365,855.00 in damages according to an arbitration claim in which Wedbush Morgan Securities Inc. was found liable on the customer’s claims of breach of contract, elder abuse, churning, unauthorized transactions, unsuitable transactions, breach of fiduciary duty, failure to supervise, misrepresentation, and fraud pertaining to the customers’ variable annuity purchases. FINRA Arbitration No. 09-04522 (Aug. 26, 2011).
