Wedbush Securities Customer Complaints

According to a December 15, 2021, press release, the US Securities and Exchange Commission stated that Wedbush Securities Inc., a California-based broker/dealer, agreed to pay more than $1.2 million to settle charges from the alleged unlawful unregistered distribution of nearly 100 million shares of more than 50 different low-priced microcap companies, and due to Wedbush’s failure to file suspicious activity reports (SARs) pertaining to those transactions. Wedbush Securities neither admitted or denied the SEC’s accusations.
According to the SEC, from January of 2017 through September of 2018, Wedbush Securities allegedly engaged in unregistered offers and sales of large blocks of low-priced securities that were part of the unlawful, unregistered distribution of securities by Silverton SA (also known as Wintercap SA), a former offshore customer of Wedbush Securities.
The order finds that Wedbush allegedly failed to conduct a reasonable inquiry into the facts surrounding the sales, and Wedbush’s offers and sales did not qualify for the usual exemption from registration that applies to brokers’ transactions. The SEC’s order also found that despite the presence of numerous red flags Wedbush Securities had identified in its written guidance to employees, Wedbush allegedly failed to file SARs for certain suspicious transactions that it executed on behalf of Silverton while the account was active, as broker/dealers are required to do so when transactions are suspected of fraudulent activity.
According to an article in Financial Advisor, in 2018, the SEC and the U.S. Attorney’s Office in Massachusetts, "brought parallel actions against a number of related parties, including Silverton’s principal, Roger Knox, alleging a fraudulent scheme involving the deposit of blocks of the securities of low-priced micro-cap companies and their subsequent illegal unregistered offer and sale."
The article states that the SEC alleged that Wedbush Securities should have been aware of the unlawful activity tied with the sale of the micro-cap stocks. According to the Financial Advisor, at the time the alleged fraud scheme was uncovered in 2018, authorities said it involved about $165 million in unlawful sales with the involvement of more than a dozen international regulators and nearly 400 bank and brokerage accounts.
The SEC stated that Wedbush Securities agreed to a cease-and-desist order, a payment of disgorgement and prejudgment interest of over $207,000, and a civil penalty of $1 million.
If you’ve experienced financial losses due to the actions or recommendations of the broker/dealer, Wedbush Securities Inc, contact Soreide Law Group and speak to an experienced securities lawyer at no cost to determine if there is a possibility of recovering your investment losses through a FINRA arbitration at:  888-760-6552.
Soreide Law Group works on a contingency fee basis and represents our clients nationwide before FINRA.