Timary Ann Delorme of Costa Mesa California a stockbroker formerly employed by Wedbush Securities Inc. has been barred by Securities and Exchange Commission (SEC) from associating with any broker or investment adviser according to an Order Instituting Administrative and Cease-And-Desist Proceedings where Delorme consented to findings that she participated in a manipulative trading scheme. In the Matter of Timary Delorme Administrative Proceeding File No. 3-18410 (Mar. 27, 2018).
According to the Order, between July of 2008 and January 2014, while Delorme was associated with Wedbush Securities Inc., she took part in a manipulative trading scheme alongside Izak Zirk Engelbrecht – an individual who in 2014 was charged and later pleaded guilty to having committed securities fraud through a pump and dump scheme involving microcap securities.
The Order stated that Engelbrecht effected manipulative trades utilizing the stock issued by microcap companies which were controlled by Engelbrecht and his cohorts. Evidently, Delorme took part in the scheme through entering trades to manipulate the stocks’ volume and price, and by indirectly procuring benefits in return for recommending that customers buy the stocks of the microcap issuers which Engelbrecht controlled. The Order revealed that customers had been solicited by Delorme to trade those stocks.
Unbeknownst to customers, Delorme was reportedly compensated by Engelbrecht when customers were placed by Delorme in the securities of the microcap companies. Delorme reportedly executed purchases of specific penny stocks to keep the market price of those stocks at artificially elevated prices. Further, Delorme apparently made it appear as though the microcap shares had a legitimate trading volume as a result of her engagement with Engelbrecht and others in matched trading. The Order revealed that Delorme and her husband sold Engelbrecht’s microcap shares on his behalf and sent him proceeds less the commission to conceal Engelbrecht’s activities.
SEC concluded that Delorme’s conduct was violative of Securities Exchange Act of 1934 Sections 10(b) and 9(a)(2); SEC Rules 10b-5(a) and 10b-5(c); and Securities Act of 1933 Sections 17(a)(1) and 17(a)(3).
FINRA Public Disclosure reveals that Delorme has been identified in three customer initiated investment related disputes containing accusations of her misconduct while employed by Wedbush Securities Inc. Specifically, a customer initiated investment related arbitration claim concerning Delorme’s activities was settled for $265,000.00 in damages based upon allegations that Delorme breached her fiduciary duties to the customer, effected unauthorized trades in the customer’s account, executed transactions that were not suitable for the customer, made misrepresentations and omissions concerning securities, and defrauded the customer in regard to the customer’s options and over-the-counter equities holdings. FINRA Arbitration No. 12-03054 (Aug. 16, 2013).
Thereafter, a customer initiated investment related arbitration claim regarding Delorme’s conduct was resolved for $50,000.00 in damages supported by accusations of breach of contract, breach of fiduciary duty, negligence, suitability and negligence relating to options and over-the-counter equities transactions placed in the customer’s account. FINRA Arbitration No. 12-03785 (Dec. 16, 2013). In addition, a customer brought an investment related arbitration claim pertaining to Delorme’s conduct in which the customer requested $250,000.00 in damages founded on allegations that contractual and fiduciary obligations to the customer had been breached, misrepresentations and omissions had been made to the customer, and the customer had been a victim of fraud. FINRA Arbitration No. 17-01923 (July 21, 2017).
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