National investment fraud lawyers KlaymanToskes is investigating Wedbush Securities after it agrees to pay $850,000 in fines following allegations from the Financial Industry Regulatory Authority (“FINRA”) that they falsified client statements. Wedbush customers that suffered investment losses as a result may be entitled to recover their losses through a FINRA arbitration claim.
According to FINRA’s Letter of Acceptance, Waive, and Consent (“AWC”), “From January 2013 through December 2018, Wedbush negligently misrepresented on monthly account statements that it sent to approximately 610 customers that certain corporate and municipal bonds were making interest or principal payments when, in fact, the bonds were in default.”
Wedbush misrepresented the performance of the defaulted bonds on account statements after they failed to implement a supervisory system that would review the statements for accuracy. In 2016, Wedbush was made aware of the misinformation, yet continued to issue false statements to customers until December 2018.
Former and current customers of Wedbush Securities that held defaulted bonds with losses in excess of $100,000 may be entitled to compensation. If you have sustained significant losses, contact Lawrence L. Klayman, Esq. at 1 (888) 997-9956 or email@example.com to discuss your legal options.
Both FINRA and the Securities and Exchange Commission (“SEC”) enforce rules that brokerage firms and financial advisors must follow related to misrepresentation, non-disclosure or omission of material facts. If a brokerage firm or financial advisor intended to misrepresent or omit material information to investors, investors can bring a securities fraud claim. In this case, Wedbush allegedly knew of the misrepresentation on the account statements and intentionally did not correct the problem timely.
The 610 Wedbush customers that held defaulted bonds between 2013 and 2018 were unaware of the risk to their portfolios. Had Wedbush provided those customers with accurate information, they could have sold their bonds to mitigate the risk associated with default and potential bankruptcy.
Investors that suffered investment losses as a result of relying on Wedbush’s account statements and misrepresentations may be entitled to recover their losses in a FINRA arbitration claim and should contact KlaymanToskes to discuss their legal options.
According to Wedbush’s Detailed Report provided by FINRA’s Broker Check, this is not Wedbush’s first regulatory encounter. In fact, to date, Wedbush Securities has been subject to 183 disclosures, including 119 prior regulatory events, as well as having been named in 60 arbitration matters.
Wedbush Securities is a brokerage firm based in Los Angeles, California. Among their 70 branch offices, Wedbush employ approximately 540 registered advisors. The volume of the regulatory events for a brokerage firm of its size speaks to the lack of their effective supervisory system and procedures, directly impacting their clients.
Wedbush itself has disclosed various disputes and investigations that they are currently involved in. According to Wedbush’s annual FOCUS Report filed with the SEC on August 29, 2022, “The Company is subject to various proceedings and claims arising primarily from securities business activities, including lawsuits, arbitration claims and regulatory matters. The Company is also involved in other reviews, investigations, and proceedings by governmental bodies and self-regulatory organizations regarding its business, which may result in adverse judgments, settlements, fines, penalties, injunctions and other relief.”
While Wedbush discloses in the report that they do not expect the disputes and/or investigations to have a material effect on the firm, it is known that the disputes include Wedbush customers that have suffered investment losses at their recommendations and mismanagement.
For investors that trust full-service brokerage firms to manage their money, investment losses can be devastating. The experienced investment fraud lawyers at KlaymanTokses are prepared to represent you against Wall Street brokerage firms. Contact attorney Lawrence L. Klayman today for a free consultation to restore your financial lifestyle.
KlaymanToskes encourages investors that did business with any of the brokers listed below to review their portfolios for investment losses or signs of broker misconduct:
KlaymanToskes can help you determine whether an investment loss is the result of a brokerage firm and/or its financial advisor’s misconduct. Contact our experienced investment fraud lawyers at 1 (888) 997-9956 or online at www.klaymantoskes.com.
KlaymanToskes is a leading national securities law firm which practices exclusively in the field of securities arbitration and litigation on behalf of retail and institutional investors throughout the world in large and complex securities matters. The firm has recovered more than $250 million for investors in FINRA arbitrations and over $350 million in other securities litigation matters for its clients. KlaymanToskes has office locations in California, Florida, New York, and Puerto Rico.