The Financial Industry Regulatory Authority (FINRA) brought charges against Wedbush Securities for its alleged failure to comply with requirements related to the protection of customer assets. FINRA alleged that Wedbush Securities failed on multiple occasions from June 2009 through June 2012 to comply with requirements under applicable law and SEC rule to promptly obtain and maintain physical possession or control of fully-paid-for securities and excess margin securities carried for its customers. It also allegedly failed to set aside on at least a weekly basis in a special account (the “reserve account”) any amounts it owes customers in excess of amounts its customers owe it. FINRA claimed that Wedbush created and/or increased deficits in its segregation requirement by improperly delivering stock shares or returning stock shares borrowed for transactions, when it did not have sufficient excess shares above the firm’s segregation requirement. FINRA alleged that Wedbush failed to protect customer assets from as early as 2004, despite being put on notice beforehand. Webush also received a Letter of Caution from FINRA on the subject in 2008.
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